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Equities
Canada’s main stock index slid in early trading Friday as concerns over the situation in Ukraine tempered investor sentiment. Wall Street’s key indexes also fell in early going after rallying earlier in the week as crude prices again topped US$100 a barrel.
At 9:33 a.m. ET (13:33 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was down 32.35 points, or 0.15%, at 21,738.87.
In the U.S., the S&P 500 was down 0.4 per cent shortly after the start of trading and the tech-heavy Nasdaq Composite is 0.6-per-cent lower. The Dow was down about 0.4 per cent after the opening bell.
Investors are continuing to monitor developments in Russia’s invasion of Ukraine. U.S. President Joe Biden is scheduled to talk to China’s President Xi Jinping and is expected to warn that Beijing against supporting Russia’s war efforts. Sentiment has also been helped though the week by optimism over peach talks between Russia and Ukraine, although a fourth day of negotiations ended with few signs of significant progress.
“Markets are trying to make sense of a hawkish FOMC [Federal Open Market Committee] that announced a dovish rate [U.S.] hike and believes it can tighten aggressively while maintaining growth,” OANDA senior analyst Jeffrey Halley said.
“Not helping was a lack of clarity from the Ukraine-Russia talks, on what so much of the market’s recent asset class price action has been built on.”
Friday's analyst upgrades and downgrades
In this country, investors got a stronger-than-expected reading on January retail sales. Statistics Canada says sales rose 3.2 per cent to $58.9-billion. Early forecasts had pegged the gain closer to 2.4 per cent. The agency said the January increase was led by sales in the auto sector.
On the corporate side, Power Corp. said it earned $626-million or 93 cents per share in the fourth quarter, up from $623-million or 92 cents per share in the prior-year quarter. Adjusted profit for the quarter totalled $676-million or $1 per share, in line with analyst forecasts and up from $627-million or 93 cents per share in the fourth quarter of 2020. The results were released after Thursday’s close.
On Wall Street, shares of FedEx were down more than 5 per cent in morning trading after the company’s adjusted net income for the fiscal third quarter increased almost 30 per cent to US$1.22-billion, or US$4.59 per share. However, that missed analysts’ call for a profit of US$4.64 per share, according to Refinitiv I/B/E/S Estimates.
Overseas, the pan-European STOXX 600 was down 0.52 per cent by midday. Britain’s FTSE 100 slid 0.55 per cent. Germany’s DAX and France’s CAC 40 were off 1.58 per cent and 1.27 per cent, respectively.
In Asia, Japan’s Nikkei finished up 0.65 per cent. Hong Kong’s Hang Seng fell 0.41 per cent.
Commodities
Crude prices were firmer on persistent supply concerns but still remained on track for weekly declines amid continued market volatility.
The day range on Brent is US$106.56 to US$109.59. The range on West Texas Intermediate is US$103.10 to US$106.28. Brent gained roughly 9 per cent on Thursday while WTI jumped about 8 per cent.
Both benchmarks, however, are down about 4 per cent for the week so far.
“Oil spiked higher on the IEA oil supply warning although Asian buyers for the last couple of previous sessions had enthusiastically bought the dips under US$100.00 a barrel,” OANDA’s Jeffrey Halley said.
“A weaker U.S. dollar was also a tailwind.”
In other commodities, gold prices fell on Friday and were on track for their worst week since late November.
Spot gold slipped 0.4 per cent to US$1,935.59 per ounce by early Friday morning. U.S. gold futures fell 0.5 per cent to US$1,933.80. Gold is down more than 2 per cent for the week.
“The Ukraine situation isn’t as intense as it was, so the anxiety isn’t really there to drive gold up as a safe-haven,” Matt Simpson, a senior market analyst at City Index, said.
Currencies
The Canadian dollar was higher, trading above 79 US cents, as its U.S. counterpart looked set for its first down week in six against a group of world currencies.
The day range on the loonie is 79.07 US cents to 79.40 US cents.
“While spot remains within recent ranges, the 1 per cent or so net gain on the USD this week leaves the CAD in position to post its highest weekly close in two months,” Shaun Osborne, chief FX strategist with Bank of Nova Scotia, said.
“Firm crude and a sub-30 VIX index are supporting short-term gains in the CAD but we think the broader, fundamental case for CAD strength is clear.”
Canadian investors get January retail sales figures before the start of trading.
On world markets, the U.S. dollar index paused for a breath on Friday, recovering slightly to 98.049 after declining every other day this week, and set for a 1.08 per cent loss over the period, Reuters reported.
The euro was slightly weaker at US$1.10835 on Friday, but up 1.62 per cent for the week.
Britain’s pound gained 0.15 per cent to US$1.3166, putting it on track for a 0.97% weekly advance.
More company news
Cannabis company Hexo Corp. reported a net loss of $690.3-million in its latest quarter as it recorded $616-million in one-time impairment charges. The company says the quarter was focused on realigning its balance sheet to position it for growth and consequently included the significant impairment charges. Hexo says the loss amounted to $1.94 per diluted share for the quarter ended Jan. 31, compared with a net loss of $20.8-million or 17 cents per share a year earlier. Net revenue in what was the company’s second quarter totalled $52.8-million, up from $32.9-million in the same quarter last year.
General Electric Co said its Chief Executive Larry Culp would take a 67% cut to an incentive grant this year after shareholders last year rejected his compensation package in a non-binding but rare rebuke over executive pay. In its annual proxy statement filed on Thursday, the Boston-based industrial conglomerate said Culp’s annual equity incentive grant for 2022 will be reduced to $5-million from $15-million.
Boeing Co is edging toward a landmark order from Delta Air Lines for up to 100 of its 737 Max 10 jets, a model it is battling in separate talks to get approved before year-end rule changes, people familiar with the matter told Reuters. The deal, if confirmed, would be the first order from Delta for Boeing’s best-selling single-aisle airplane family, and the first major Boeing order for the carrier in a decade.
Economic news
(8:30 a.m. ET) Canadian retail sales for January.
(8:30 a.m. ET) Canada’s New Housing Price Index for February.
(10 a.m. ET) U.S. existing home sales for February.
(10 a.m. ET) U.S. leading indicator for February.
With Reuters and The Canadian Press