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Equities
Canada’s main stock index gained at Thursday’s opening bell on strength in energy shares and solid global sentiment. On Wall Street, the Nasdaq was up more than 1 per cent in early trading with a rise in Tesla Inc. stock providing a lift.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 80.36 points, or 0.37 per cent, at 22,078.74.
In the U.S., the Dow Jones Industrial Average rose 98.0 points, or 0.28 per cent, at the open to 35258.8.
The S&P 500 rose 29.7 points, or 0.67 per cent, at the open to 4489.17, while the Nasdaq Composite rose 170.6 points, or 1.27 per cent, to 13623.704 at the opening bell.
Earnings continue to be a key driver for Wall Street.
Shares of electric vehicle maker Tesla were up more than 9 per cent on the Nasdaq shortly after the North American open after the company handily beat analysts’ forecasts. In the most recent quarter, Tesla posted earnings per share of $3.22, beatings analysts’ estimates of $2.26. On a conference call, CEO Elon Musk said Tesla has a reasonable shot at achieving 60-per-cent vehicle delivery growth this year.
“Earning beats are easing broader stock market concerns with consistent Q1 beats coming through - although all are in the shade of the dramatic beat at Tesla,” Stephen Innes, managing partner SPI Asset Management,” said.
“Still, there are very few - if any - changes to full-year guidance. Not that those changes should come this early in the year, especially given such uncertainty around geopolitics, supply chains and demand destruction from inflation. But the market has put its blinkers to any thought of unwelcome news and, at best, de-risking full-year estimates.”
Later in the session, markets will hear from Federal Reserve chair Jerome Powell and ECB president Christine Lagarde when they speak at an event in Washington. Economists will be closely watching Mr. Powell’s remarks for further suggestions that the U.S. central bank plans to raise interest rates by a half percentage point at its next policy meeting. The appearance marks the last public remarks from Mr. Powell before heading into the quiet period before the Fed policy meeting.
In this country, investors got results from grocer Metro Inc. before the start of trading.
Metro’s net earnings grew to $198.1-million or 82 cents per share in the second quarter, compared to $188.1-million or 75 cents per share the prior year. The company, which owns grocery chains including Metro, Super C and Food Basics, as well as pharmacy chain Jean Coutu, reported that sales grew by 1.9 per cent in the quarter to $4.3-billion. The Globe’s Susan Krashinsky Robertson reports that the retailer also warned that inflationary pressures and labour shortages could put pressure on its profit margins if they are prolonged.
On Wall Street, investors will get results from Snap Inc. after the close of trading.
Overseas, the pan-European STOXX 600 was up 0.70 per cent by midday. Britain’s FTSE 100 gained 0.28 per cent. Germany’s DAX and France’s CAC 40 advanced 1.41 per cent and 1.90 per cent, respectively.
In Asia, Japan’s Nikkei closed up 1.23 per cent. Hong Kong’s Hang Seng fell 1.25 per cent. In their Shanghai debut, shares of Chinese energy giant CNOOC Ltd surged as much as 44 per cent before ending up 27.7 per cent.
Commodities
Crude prices were higher as supply uncertainty continues to fuel market uncertainty.
The day range on Brent is US$106.83 to US$109.12. The range on West Texas Intermediate is US$102.01 to US$104.32.
“I continue to expect that Brent will remain in a choppy US$ 100 to US$120 range, with WTI in a US$95 to US$115.00 range,” OANDA senior analyst Jeffery Halley said.
“A potential European oil embargo on Russia next week after this weekend’s French elections could see a move towards the top of the range.”
Supply has already been pinched by an outage in Libya this week. Libya, a member of OPEC, on Wednesday said the country was losing more than 550,000 barrels per day of oil output due to blockades at major fields and export terminals, according to Reuters.
Meanwhile, the latest weekly inventory figures from the U.S. Energy Information Administration showed a share drop in crude stocks due to a jump in exports.
Crude inventories fell by 8 million barrels in the week ended April 15 to 413.7 million barrels. Analysts had been looking for an increase of more than 2 million barrels.
In other commodities, gold prices slid as yields on U.S. Treasurys again rose.
Spot gold was down 0.4 per cent at US$1,948.97 per ounce by early Thursday morning. U.S. gold futures were down 0.1 per cent at US$1,952.70.
“Gold still looks vulnerable and failure of US$1940 could see more speculative long positions getting culled and gold falling to US$1915 an ounce,” Mr. Halley said.
“However, gold’s price action in the past few weeks has been quietly signalling those risks, be they inflation or geopolitical, have been increasing. Nothing I can see has changed that fact, and thus, the deeper correction lower could be an opportunity to load up again at much better levels.”
Currencies
The Canadian dollar was trading above 80 US cents after a hot reading on March inflation raised the prospect of further aggressive tightening by the Bank of Canada.
The day range on the loonie is 79.95 US cents to 80.27 US cents. On Wednesday, Statistics Canada said the annual rate of inflation jumped to 6.7 per cent in March, up a full percentage point from a month earlier, sending the Canadian dollar to its best level in three weeks against the U.S. dollar.
“The sizable headline CPI beat fully locks in a 50 basis point hike in June and while market pricing remains indecisive around another 50 basis point increase in July we think there is a high chance the BoC delivers another 50bps.,” Shaun Osborne, chief FX strategist with Bank of Nova Scotia, said.
“[BoC governor Tiff] Macklem’s appearance in Parliament next Monday may reinforce expectations further and a hawkish BoC will continue to support CAD gains over the coming months.”
On world markets, the U.S. dollar index, which weighs the greenback against a group of world currencies was down 0.4 per cent at 99.97 by early Thursday morning.
Against the U.S. dollar, the euro rose 0.4 per cent to $1.0895 and its highest levels since April 14 as expectations grow that the European Central Bank could start raising interest rates this summer.
In bonds, the yield on the U.S. 10-year note was up at 2.879 per cent in the predawn period.
More company news
William Ackman’s hedge fund Pershing Square Holdings Ltd said on Wednesday that it exited its Netflix Inc investment as the streaming service’s stock price plunged and the billionaire investor absorbed more than US$400-million in losses on the bet. Ackman, who had become the company’s most prominent backer when he said he bought 3.1 million shares in January, reacted quickly to Wednesday’s drop in shares and sold the entire stake.
Chemicals maker Dow Inc reported an over 58-per-cent jump in first-quarter profit, helped by stronger product prices as supplies remained tight amid robust demand. Net income attributable to Dow stockholders rose to US$1.57-billion, or US$2.11 per share, compared with US$991-million, or US$1.32 per share, a year ago. Excluding items, Dow’s operating earnings rose to US$2.34 per share from US$1.36 a year ago.
American Airlines Group Inc reported a smaller adjusted first-quarter loss on Thursday, as a strong pickup in travel in March helped offset a blip in January caused by the Omicron variant of COVID-19. The Fort Worth, Texas-based airline reported an adjusted loss of US$1.51-billion, or US$2.32 per share, for the quarter ended March 31, compared with a loss of US$2.74-billion, or US$4.32 per share, a year earlier.
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week ended April 16.
(8:30 a.m. ET) U.S. Philadelphia Fed Index for April.
(10 a.m. ET) U.S. leading indicator for March.
(1 p.m. ET) U.S. Fed Chair Jerome Powell and ECB President Christine Lagarde join an IMF panel discussion on the global economy.
With Reuters and The Canadian Press