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Equities
Canada’s main stock index gained early Thursday, buoyed by advancing energy and mining shares alongside improved commodity prices. In the U.S., key indexes dipped after the previous sessions rally as investors weigh the Federal Reserve’s rate hike and cautiously watched the situation in Ukraine.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 88.39 points, or 0.41 per cent, at 21,557.22.
In the U.S. , the Dow Jones Industrial Average fell 67.71 points, or 0.20 per cent, at the open to 33,995.39.
The S&P 500 opened lower by 12.75 points, or 0.29 per cent, at 4,345.11, while the Nasdaq Composite dropped 75.83 points, or 0.56 per cent, to 13,360.72 at the opening bell.
The moves came after the Fed delivered its expected 25-basis-point increase, the first in more than three years, and indicated that it would continue along that path as it looks to battle inflationary pressures. Sentiment was also underpinned by some signs of progress in talks between Ukraine and Russia.
“It is now clear that the Fed’s and [U.S. President Joe] Biden’s top priority is now the price stability and there will be at least one 25bp hike in all of the next 6 meetings to come,” Swissquote senior analyst Ipek Ozkardeskaya said.
“The famous dot plot shows that the benchmark rate could end the year at about 1.90%, and then rise to about 2.8% next year, with dots placed above 3% for this year, and 3.50% for the next showing that some members are really serious about bringing inflation to the 2% target.”
She said the market is now expecting to see a 75-basis-point increase over the next two Fed meetings, suggesting one move will be by half a percentage point.
Thursday's analyst upgrades and downgrades
In this country, investors got results from Candarm maker MDA Ltd ahead of the open. Power Corp. reports after the close of trading.
MDA Ltd. reported a fourth-quarter profit of $600,000 compared with a loss of $12.6-million in the last three months of 2020 as its revenue rose 15 per cent. The satellite and space technology company said the profit amounted to less than a penny per diluted share for the quarter ended Dec. 31, compared with a loss of 16 cents per diluted share a year earlier.
Revenue totalled $115.5-million, up from $100.2-million in the fourth quarter of 2020.
Overseas, the pan-European STOXX 600 was flat by midday. Britain’s FTSE 100 gained 0.03 per cent with investors weighing the Bank of England’s decision to raise rates for a third meeting in a row. That central bank is expected to hike rates by a quarter percentage point. Germany’s DAX fell 0.84 per cent. France’s CAC 40 slid 0.11 per cent.
In Asia, Japan’s Nikkei jumped 3.46 per cent on a strong handoff from Wall Street. Hong Kong’s Hang Seng spiked 7.04 per cent helped by gains in tech and property stocks.
Commodities
Crude prices advanced in early going, although remained weaker for the week so far, as demand concerns continue underpin sentiment.
The day range on Brent is US$97.75 to US$102.13. The range on West Texas Intermediate is US$94.85 to US$98.69. Both benchmarks were up about 3 per cent in the premarket period.
On Wednesday, the International Energy Agency said markets could lose three million barrels a day of Russian crude from April.
“Questions about how much Russian oil will continue to swing and uncertainty in how bad crude demand destruction will get will keep energy markets jittery,” Edward Moya, a senior market analyst for OANDA, said in a note.
In other commodities, gold prices advanced, helped by a weaker U.S. dollar.
Spot gold rose 0.4 per cent to US$1,936.26 per ounce, after touching its lowest since Feb. 28 at US$1,894.70 on Wednesday. U.S. gold futures rose 1.3 per cent to US$1,934.20.
Currencies
The Canadian dollar was higher, trading around 79 US cents, while its U.S. counterpart slid against a group of world currencies.
The day range on the loonie is 78.74 US cents to 79.05 US cents.
“Firmer crude is giving the CAD a bit of an additional tailwind but whether the CAD can extend beyond recent range extremes remains to be seen, given the still uncertain risk backdrop,” Shaun Osborne, chief FX strategist with Scotiabank, said in an early note.
On Wednesday, the loonie saw its highest level in more than a week against the greenback after new figures showed the annual rate of inflation rose to 5.7 per cent in February, bolstering the case for aggressive rate hikes by the Bank of Canada.
There were no major Canadian economic releases due Thursday.
On world markets, the U.S. dollar index, which measures its strength against six trading currencies, fell 0.3 per cent.
The euro gained 0.3 per cent to a one-week high of $1.167, according to figures from Reuters.
Japan’s yen fell 0.1 per cent to 118.67, near its lowest since February 2016, hit on Wednesday at 119.12 as the Bank of Japan ruled out tightening monetary policy.
More company news
Close to 3,000 employees of Canadian Pacific Railway Ltd. could be off the job early Sunday morning. Calgary-based CP Rail said in a release Wednesday that it has issued 72-hour notice to the Teamsters Canada Rail Conference of its plan to lock out employees at 00:01 eastern time on Sunday if the union and the company are unable to come to a negotiated settlement or agree to binding arbitration. CP Rail said it tabled an offer Tuesday to address 26 outstanding issues, including the union’s key issues of wages, benefits and pensions through final and binding arbitration.
Dollar General Corp forecast full-year sales above analysts’ estimates on Thursday, as higher prices of everyday essentials make more Americans frugal and turn to discount stores for their groceries and household supplies. The discount store operator forecast full-year net sales to increase about 10%, while analysts on average expect growth of 7.5%, according to IBES data from Refinitiv.
U.S. tech giant Microsoft is facing an antitrust complaint filed by three European rivals in the booming cloud computing business, one the plaintiffs said on Thursday. The complaint, filed with the European Union’s competition watchdog months ago, alleges that Microsoft’s contractual and business practices make it costly and difficult for users of its cloud computing services to opt for those of a competitor, a source close to the matter told Reuters.
Economic news
(8:30 a.m. ET) U.S. weekly initial jobless claims.
(8:30 a.m. ET) U.S. housing starts for February.
(8:30 a.m. ET) U.S. building permits for February.
(9:15 a.m. ET) U.S. industrial production and capacity utilization for February.
With Reuters and The Canadian Press