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Equities

Canada’s main stock index started higher Thursday, extending gains seen in the previous session. On Wall Street, indexes were also positive in early trading after a reading on wholesale inflation helped further ease concerns about spiking price pressures.

At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 145.71 points, or 0.73 per cent, at 20,031.65.

In the U.S., the Dow Jones Industrial Average rose 142.00 points, or 0.43 per cent, at the open to 33,451.51.

The S&P 500 opened higher by 17.16 points, or 0.41 per cent, at 4,227.40, while the Nasdaq Composite gained 90.02 points, or 0.70 per cent, to 12,944.82 at the opening bell.

On Wednesday, new figures showed that the annual rate of inflation fell to 8.5 per cent in July from 9.1 per cent in June. Investors have been watching for signs that inflationary pressures are peaking, suggesting that the Federal Reserve may not have to resort to further outsized rate hikes to bring price pressures under control. Meanwhile, figures released early Thursday also showed U.S. wholesale inflation rose more slowly in July on an annual basis. On a monthly basis, the U.S. producer price index fell 0.5 per cent from June, marking the first month-over-month decline since April 2020.

“I expect we’ll continue to see policymakers unsuccessfully push back against market expectations in the coming weeks while further driving home the message that data dependency works both ways,” OANDA senior analyst Craig Erlam said.

“That said, the inflation report has further fueled the optimism already apparent in the markets and could set the tone for the rest of the summer.”

In this country, a raft of earnings are due Thursday with Brookfield Asset Management, Cineplex, Canadian Tire, Canada Goose reported results before the start of trading.

The Globe’s Susan Krashinsky Robertson reports that Canadian Tire posted net income attributable to shareholders of $145.2-million or $2.45 per share in the 13 weeks ended July 2, compared to $259.1-million or $3.68 per share in the same period the prior year. Canadian Tire also said that demand for its products remains healthy, even in an inflationary environment.

Excluding efficiency costs and $33.4-million related to the Russia exit, the company said normalized net income attributable to shareholders was $185.8-million or $3.11 per share.

Canadian insurance giant Manulife Financial reported core earnings of $1.56-billion, or 78 cents a share, in the three months ended June 30, compared with $1.68-billion, or 83 cents a share, a year earlier. Analysts had expected 76 cents a share. Net income attributable to shareholders was $1.09-billion or 53 cents per share, compared with $2.65-billion, or $1.33 a share, a year earlier. The results were released after Wednesday’s close.

On Wall Street, shares of Walt Disney Co. jumped more than 7 per cent in morning trading after that company reported adjusted earnings per share of US$1.09, up 36 per cent from a year earlier. Analysts polled by Refinitiv had expected earnings of 96 US cents. The company also posted stronger-than-expected subscriber numbers for its Disney+ streaming service.

Overseas, the pan-European STOXX 600 was up 0.07 per cent by midday. Britain’s FTSE slid 0.51 per cent. Germany’s DAX rose 0.26 per cent while France’s CAC 40 was flat.

In Asia, Hong Kong’s Hang Seng rose 2.4 per cent. Markets in Japan were closed.

Commodities

Crude prices gained after the International Energy Agency raised its demand forecast for the year, although a rise in weekly U.S. inventories put a ceiling on the advance.

The day range on Brent is US$96.63 to US$98.01. The range on West Texas Intermediate is US$91.24 to US$92.55.

Crude prices drew early support from the IEA’s monthly forecast. In the latest outlook, the agency raised its outlook for demand for 2022 by 380,000 barrels.

“Natural gas and electricity prices have soared to new records, incentivizing gas-to-oil switching in some countries,” the IEA said.

Gains, however, were capped by the latest weekly inventory figures from the U.S. Energy Information Administration, which showed crude stocks rose by 5.5 million barrels. Analysts had been expecting a smaller increase of 73,000 barrels.

“Crude demand isn’t roaring here and as production nears the return to prepandemic levels, the oil market isn’t looking so tight anymore,” OANDA senior analyst Ed Moya said in a note.

In other commodities, gold prices edged lower on Thursday from last session’s one-month high.

Spot gold fell 0.3 per cent to US$1,786.71 per ounce by early Thursday morning, after hitting its highest since July 5 at US$1,807.79 on Wednesday.

U.S. gold futures slipped 0.6 per cent to US$1,802.30.

Currencies

The Canadian dollar was little changed in early going, supported by improved risk sentiment, while its U.S. counterpart slid against a group of world currencies on easing concerns over the course of rate hikes in coming months.

The day range on the loonie is 77.93 US cents to 78.39 US cents. In the predawn period, the Canadian dollar was closer to the top end of that spread.

“The CAD picked up some ground against the weaker USD yesterday but gains were the smallest among the G10 currencies (and the CAD remains a relative underperformer today) as markets also trimmed BoC hike prospects a little, assuming — apparently — that Canadian CPI data (due on the 16th) would show similar restraint as the U.S. data did,” Shaun Osborne, chief FX strategist with Scotiabank, said.

“There is no guarantee of that, of course.”

There were no major Canadian economic releases on Thursday’s calendar.

On world markets, the U.S. dollar index slid 0.2 per cent to 105.010 in European trading, after recording its biggest daily decline in five months, of 1 per cent, the previous day, according to figures from Reuters.

The euro was last up a quarter of a per cent at US$1.03255.

The yen gained 0.2 per cent to 132.615 yen per U.S. dollar.

Britain’s pound was little changed against the U.S. dollar at US$1.22250.

In bonds, the yield on the U.S. 10-year note was down slightly at 2.775 per cent in the predawn period.

More company news

The Globe’s David Milstead reports Brookfield Asset Management reported a 39-per-cent decline in net income, to US$1.48-billion, owing, in part, to decreased gains on the sale of assets and an increase in interest expenses that outpaced revenue gains. The company’s funds-from-operations metric, which removes a number of non-cash items from the calculation, and the company’s “distributable earnings,” which removes additional expense items and adds back in dividends from Brookfield’s investments, fell by more modest amounts.

The Globe’s Susan Krashinsky Robertson reports Cineplex Inc., helped by blockbuster box-office returns for the new Top Gun: Maverick, Canada’s largest movie theatre chain on Thursday reported its first quarterly profit since before the pandemic began. Cineplex reported net income of $1.3-million or 2 cents per share in the three months ended June 30, compared to a net loss of $103.7-million or $1.64 per share in the same period last year.

Canada Goose Holdings Inc beat Wall Street estimates for quarterly revenue, as consumers undeterred by decades-high inflation boosted sales of its luxury parkas and jackets. The company’s revenue rose to $69.9-million in the first quarter ended July 3, from $56.3-million, a year earlier. Analysts had expected revenue of $62.6-million, according to IBES data from Refinitiv.

McDonald’s Corp said on Thursday it plans on reopening its restaurants in Ukraine over the next few months in an early sign of western businesses returning to the country, even as the conflict with Russia continues. The company closed all its restaurants in Ukraine and Russia in March, with McDonald’s selling most of its restaurants in Russia to one of its local licensees in May.

Economic news

(830 am ET) U.S. initial weekly jobless claims

(830 am ET) U.S. producer product price index final demand for July.

With Reuters and The Canadian Press