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Equities
Canada’s main stock index started higher Thursday with financial shares gaining on the back of the Bank of Canada’s latest rate move. In the U.S., indexes edged higher with investors sifting through earnings from some of the biggest banks in that country.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 40.08 points, or 0.18 per cent, at 21,878.1.
On Wall Street, the Dow Jones Industrial Average rose 63.9 points, or 0.18 per cent, at the open to 34628.46.
The S&P 500 rose 2.5 points, or 0.06 per cent, at the open to 4449.12, while the Nasdaq Composite rose 3.8 points, or 0.03 per cent, to 13647.425 at the opening bell.
On Thursday morning, earnings will continue to drive trading on Wall Street.
“Earnings season is here and so far the takeaway is that the short-term outlook for the economy is pretty good and that the consumer is handling widespread price increases,” OANDA senior analyst Ed Moya said.
This morning U.S. investors get results from big U.S. banks, including Goldman Sachs, Morgan Stanley and Citigroup.
Ahead of the open, Morgan Stanley said profit fell to US$3.54-billion, or US$2.02 per share, in the quarter ended March 31, from US$3.98-billion, or US$2.19 per share, a year earlier. Goldman Sachs, meanwhile, said profit applicable to common shareholders fell to US$3.83-billion, or US$10.76 per share, in the quarter ended March 31, from US$6.71-billion, or US$18.60 per share, a year ago. Citigroup said net income fell to US$4.30-billion, or US$2.02 per share, for the quarter to March 31, from US$7.94-billion, or US$3.62 per share, a year earlier.
Goldman shares were higher in early trading while Morgan Stanley and Citi shares were little changed.
In Canada, Cogeco Inc. posted an increase of almost 8 per cent in second-quarter profit.
The Montreal-based company said net income attributable to shareholders was $118.8-million or $2.29 per diluted share for the period, up from $110.2-million or $2.11 per share a year earlier. Revenue for the quarter increased 14.5 per cent to $748.1-million, from $653.2 million in the second quarter of 2021. Cogeco was expected to earn $2.27 per share on $741.2-million of revenues, according to financial data firm Refinitiv.
On the economic side, Statscan says February factory sales rose 4.2 per cent, more than the 3.7-per-cent increase economists had been forecasting.
South of the border, weekly jobless claims totalled 185,000 last week, according to the U.S. Department of Labor.
Overseas, the pan-European STOXX 600 was up 0.28 per cent after of the latest policy announcement from the ECB. The European Central Bank kept its policy stance broadly unchanged and held to plans to slowly unwind extraordinary stimulus.
Britain’s FTSE 100 rose 0.05 per cent by afternoon. Germany’s DAX and France’s CAC 40 both rose 0.61 per cent.
In Asia, Japan’s Nikkei rose 1.22 per cent. Hong Kong’s Hang Seng finished up 0.67 per cent.
Commodities
Crude prices gave back some of the previous session’s gains in early going with markets weighing a spike in U.S. oil inventories against continued supply concerns.
The day range on Brent is US$107.01 to US$108.91. The range on West Texas Intermediate is US$102.46 to US$104.33. Both contracts rose more than 3 per cent on Wednesday.
In its weekly report, the U.S. Energy Information Administration said oil stocks rose by more than 9 million barrels last week, far more than analysts had forecast. However, U.S. gasoline stocks fell 3.6 million barrels last week and distillate inventories also declined.
“I expect Brent to remain in a choppy US$100 to US$120 range, with WTI in a US$95 to US$115.00 range,” OANDA senior analyst Jeffery Halley said, also noting that trading is likely to be thin Thursday ahead of the long weekend.
Meanwhile, supply worries continue to underpin prices. The International Energy Agency on Wednesday warned that “from May onwards, close to 3 million barrels per day could be offline as the full impact of a widening customer-driven voluntary embargo on Moscow comes into effect.”
Reuters also reported that global trading houses are also planning to curtail crude and fuel purchases from Russia’s state-controlled oil companies in May.
In other commodities, gold prices edged lower but remained on track for a second week of gains.
Spot gold slid 0.3 per cent to US$1,972.17 per ounce. Gold had gained for the past six sessions. U.S. gold futures were down 0.4 per cent at US$1,977.20.
Currencies
The Canadian dollar gained after the Bank of Canada hiked rates by half a percentage point while its U.S. counterpart slid against a group of currencies.
The day range on the loonie is 79.47 US cents to 79.75 US cents.
On Wednesday, the Bank of Canada hiked its key rate by 0.5 per cent to 1 per cent, its biggest move in two decades. Economists had widely expected the half point increase as the central bank looks to temper rising inflation.
“While the initial reaction in FX markets and Canadian bonds to [Wednesday’s] BoC decision was relatively muted, the bank’s decision to hike by 50 basis points and sound hawkish has helped bond yields remain relatively stable amid a broad G10 bond bid,” Simon Harvey, head of FX analysis with Monex Canada, said in a note.
On world markets, the U.S. dollar index, which measures the greenback against six peers, was down 0.1 per cent at 99.702, after touching its highest of 100.520 since May 2020 on Wednesday, according to figures from Reuters.
The euro, after hitting its lowest since March on Wednesday, rose 0.12 per cent to US$1.09050, ahead of the ECB policy meeting.
In bonds, the yield on the U.S. 10-year note was up modestly at 2.692 per cent in the predawn period.
More company news
Billionaire Elon Musk has offered to buy Twitter for US$41.39-billion, a regulatory filing showed on Thursday. Musk’s offer price of US$54.20 per share represents a 38% premium to the closing price of Twitter’s stock on April 1, the last trading day before the Tesla CEO’s over 9-per-cent investment in the company was publicly announced. Twitter shares gained on the news.
Wells Fargo & Co reported a nearly 21% drop in first-quarter profit on Thursday, as rising inflation and interest rates, as well as worries over the economic impact of the Ukraine war dented its core businesses. The fourth-largest U.S. lender posted a profit of US$3.67-billion, or 88 US cents per share, for the three months ended March 31, compared with US$4.64-billion, or US$1.02 per share, a year earlier. Analysts on average were expecting the bank to report a profit of 80 US cents per share, according to Refinitiv data.
Barrick Gold, said first-quarter production fell 17.7% from the previous three months, hurt by lower output at its Carlin and Cortez mines. The company’s total preliminary gold production stood at 990 million ounces in the three months ended March 31, compared with 1.20 million ounces in the fourth quarter.
Economic news
(8:30 a.m. ET) Canada’s manufacturing sales and new orders for February.
(8:30 a.m. ET) Canadian wholesale trade for February.
(8:30 a.m. ET) U.S. initial jobless claims for week of April 9.
(8:30 a.m. ET) U.S. retail sales for March.
(8:30 a.m. ET) U.S. import prices for March.
(10 a.m. ET) U.S. business inventories for February.
(10 a.m. ET) U.S. University of Michigan consumer sentiment for April (preliminary reading).
ECB monetary policy meeting
With Reuters and The Canadian Press