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Equities
Canada’s main stock index opened higher Friday alongside improved global markets and helped by positive earnings from CIBC and National Bank. On Wall Street, key indexes continued the previous sessions rally with investors keeping a close eye on the fast-changing situation in Ukraine.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 41.13 points, or 0.2 per cent, at 20,803.06.
In the U.S., the Dow Jones Industrial Average rose 53.39 points, or 0.16 per cent, at the open to 33,277.22.
The S&P 500 opened higher by 9.68 points, or 0.23 per cent, at 4,298.38, while the Nasdaq Composite gained 11.67 points, or 0.09 per cent, to 13,485.26 at the opening bell.
Russia’s invasion of Ukraine sparked a series of targetted financial sanctions against Russia by Western nations. But U.S. and European officials have held back on opting for the time being to boot Russia off SWIFT, the dominant system for global financial transactions. Sanctions also avoided a boycott of Russian oil.
“While the sanctions set to be imposed are on a significantly stronger scale than any previous ones announced, they are unlikely to be enough to change Putin’s calculus in the short term, given that Russia’s energy markets, along with other key exports, and access to SWIFT [Society for Worldwide Interbank Financial Telecommunication] were left out,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“There could also be a geographical element in yesterday’s rebound, with the perception that U.S. companies might be better insulated from events that are currently taking place in Europe,” he said in an early note.
On the corporate side, Canadian bank earnings continue on Friday with results from CIBC and National Bank.
CIBC reported said net income excluding one-off items increased to $4.08 a share in the three months ended Jan. 31, compared with $3.58 a year earlier. Analysts had expected $3.67 a share, according to IBES data from Refinitiv. CIBC shares were up more than 4 per cent in early trading in Toronto.
National Bank, meanwhile, said net income excluding one-off items increased to $2.65 per share in the three months ended Jan. 31, compared with $2.15 a year earlier. Analysts had expected $2.23 per share, according to IBES data from Refinitiv. The bank also said chief financial officer Ghislain Parent will move on to a new role and Marie Chantal Gingras, the bank’s senior vice president of financial accounting, will take over the CFO position. National Bank shares advanced more than 1 per cent shortly after the opening bell.
On Thursday, Royal Bank kicked off off earnings from the country’s biggest lenders, reporting a 6-per-cent rise in profit for the first quarter. The Globe’s James Bradshaw reports that the big banks now face mounting geopolitical tensions as Russia invaded Ukraine, which has compounded existing risks to the global economy from supply chain disruptions, labour shortages and high levels of inflation.
Elsewhere in the corporate landscape, Hydro One, Onex and Centerra Gold are all scheduled to report results.
Overseas, the pan-European STOXX 600 rose 2.36 per cent in morning trading. Thursday’s rally on Wall Street came after the close in Europe, suggesting at least some of Friday’s strength came as stocks played catch-up. Britain’s FTSE 100 rose 2.68 per cent. Germany’s DAX and France’s CAC 40 were up 2.27 per cent and 2.58 per cent, respectively.
In Asia, Japan’s Nikkei closed up 1.95 per cent. Hong Kong’s Hang Seng slid 0.59 per cent.
Commodities
Crude prices wavered in early going after the previous session’s sharp rise on supply concerns in the wake of trade sanctions on Russia.
The day range on Brent is US$96.03 to US$98.36. The range on West Texas Intermediate is US$93.03 to US$95.64. Prices were up about 1 per cent in the predawn period, before losing altitude.
A day earlier, crude prices breached US$100 a barrel, with Brent breaking through US$105, before pulling back somewhat.
“The barrel of US crude traded above the US$100-mark yesterday then eased back to around US$96 as Joe Biden said the U.S. will release its strategic oil reserves to ease the pressure at the pump,” Swissquote senior analyst Ipek Ozkardeskaya said.
“Also, there is increased possibility of a nuclear deal with Iran to unlock the Iranian oil potential - which would provide up to 800′000 barrels of additional supply per day. That could help easing the energy crisis and pull the energy prices lower, yet the easing impact could remain limited as long as the OPEC+ constraints supply and the post-pandemic demand quickly absorbs the available reserves.”
Meanwhile, gold prices rose on Friday after big swings the previous day.
Spot gold gained 0.5 per cent to US$1,912.31 per ounce as of early Friday morning, after hitting its highest since September 2020 at US$1,973.96 on Thursday. It was set for a fourth straight weekly gain. U.S. gold futures, however, slid 0.6 per cent to US$1,915.00.
“I expect dips to remain supported in gold now that the fast money has disappeared, and some normality has returned to trading,” Oanda senior analyst Jeffrey Halley said.
“Gold’s next move will be determined by whether markets receive indirect confirmation that the West has reached peak-sanctions with Russia, or whether they intend to escalate them further.”
Currencies
The Canadian dollar was little changed, holding around 78 US cents, while its U.S. counterpart steadied against world currencies as markets walked back some of the previous session’s moves.
The day range on the loonie is 77.99 US cents to 78.35 US cents.
“The Canadian dollar is little changed on the day as market sentiment steadies and investors perhaps feel the worst may be over after the initial shock of the Ukraine invasion headlines,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“After a volatile week for the Canadian dollar where external developments have been the key driver, the focus will shift to next week’s BoC policy decision. Markets continue to fully expect a hike Wednesday and, as market conditions have settled somewhat late in the week.”
On world markets, the U.S. dollar index steadied at 97.162 after climbing to its highest level since June 2020 the previous day, according to figures from Reuters.
The euro was last at US$1.1175, edging 0.15 per cent lower against the U.S. dollar, having touched its lowest US$1.1106 since May 2020 on Thursday.
Britain’s pound also recovered some ground from Thursday’s tumble to trade flat against the greenback at US$1.3389, having hit a 2022 low of US$1.3272 on Thursday.
More company news
Hydro One Ltd. reported a fourth-quarter profit attributable to common shareholders of $159-million, down from $161-million a year earlier. The utility says the profit amounted to 27 cents per share for the quarter ended Dec. 31, unchanged from the last three months of 2020. Revenue, net of purchased power for the quarter, amounted to $865 million, up from $821 million a year earlier.
The three largest U.S. drug distributors and drug maker Johnson & Johnson have agreed to finalize a proposed $26-billion settlement resolving claims by states and local governments that they helped fuel the U.S. opioid epidemic. Distributors McKesson Corp, AmerisourceBergen Corp, Cardinal Health Inc along with J&J had until Friday to decide whether enough cities and counties nationally had opted to join the landmark settlement to justify moving forward with it.
Economic news
(8:30 a.m. ET) Canadian wholesale trade for January.
(8:30 a.m. ET) U.S. personal spending for January.
(8:30 a.m. ET) U.S. core PCE price index for January.
(8:30 a.m. ET) U.S. durable and core orders for January.
(10 a.m. ET) U.S. University of Michigan consumer sentiment for February.
(10 a.m. ET) U.S. pending home sales for January. Estimate is a rise of 1.0 per cent from the previous month.
With Reuters and The Canadian Press