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Equities

Canada’s main stock index posted gains at Friday’s opening bell while Wall Street also saw an early advance and looked headed for a positive week.

At 9:35 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 49.1 points, or 0.25 per cent, at 20,040.98.

In the U.S., the Dow Jones Industrial Average rose 94.05 points, or 0.28 per cent, at the open to 33,430.72.

The S&P 500 opened higher by 17.75 points, or 0.42 per cent, at 4,225.02, while the Nasdaq Composite gained 86.40 points, or 0.68 per cent, to 12,866.31 at the opening bell.

“This week has been all about the inflation data and, frankly, it could be the dominant force in the markets now right up until the Jackson Hole symposium,” OANDA senior analyst Craig Erlam said.

“The fact that inflation not only decelerated in the U.S. but at a faster pace than the consensus forecasts was a double win and risk assets are feeling the benefit.”

However, he also noted that much of the recent easing of U.S. inflationary pressures was helped by declines in energy prices.

“This isn’t something that’s going to sway the Fed at all even if it will ease the burden on the economy a little,” he said. “The Fed will need to see broader signs of inflationary pressures softening to ease off the brake into year-end.”

The Fed’s next policy decision is set for Sept. 21. Many economists are now expecting an increase of 50 basis points after two 75-basis-point increases. On Thursday, San Francisco Federal Reserve Bank president Mary Daly said a half percentage point move in September “makes sense” but she would also be open to a bigger increase if needed.

In this country, Rogers Communications Inc and Shaw Communications Inc. have signed a deal to sell the former’s division Freedom Mobile to Videotron Ltd, a subsidiary of Quebecor, the companies said on Friday. The announcement comes as Rogers attempts to complete its planned takeover of Shaw.

Meanwhile, Statistics Canada reported that investment in building construction rose 0.3 per cent to $20.8-billion in June. The agency says gains in the non-residential sector helped keep overall investment levels up.

Overseas, the pan-European STOXX 600 gained 0.07 per cent by midday. Britain’s FTSE 100 added 0.25 per cent. Germany’s DAX and France’s CAC 40 were up 0.45 per cent and 0.22 per cent, respectively.

In Asia, Japan’s Nikkei bounced 2.62 per cent after being closed on Thursday. Hong Kong’s Hang Seng rose 0.46 per cent.

Commodities

Crude prices were lower in early going but still looked set for a weekly advance, helped by easing concerns about broader economic growth.

The day range on Brent is US$97.41 to US$100.38. The range on West Texas Intermediate is US$91.80 to US$94.81. Brent looked set for a weekly gain of about 3 per cent after the previous week’s double-digit decline.

“There’s been a lot to digest this week, with Iran nuclear talks ongoing, U.S. inventories rising, U.S. output also rising, the Druzhba pipeline saga and the various forecasts,” OANDA’s Craig Erlam said in an early note.

“Even the forecasts themselves offered contrasting views, with OPEC downgrading demand growth and expecting the oil market to tip into surplus this quarter. The IEA, meanwhile, anticipates stronger demand growth due in part to the gas to oil switch as some countries react to sky-high prices.”

On Thursday, OPEC cut its global demand forecast for this year by 260,000 barrels a day.

At the same time, the International Energy Agency hiked its outlook for Russian oil supply by 500,000 bpd for the second half of 2022.

In other commodities, gold prices ticked lower but still looked like they were headed for gains on the week, helped by recent weakness in the U.S. dollar.

Spot gold was down 0.1 per cent at US$1,787.83 per ounce by early Friday morning. A positive week would mark the fourth consecutive weekly gain for bullion.

U.S. gold futures fell 0.2 per cent to US$1,804.00.

Currencies

The Canadian dollar was steady while its U.S. counterpart edged higher against world currencies.

The day range on the loonie is 77.94 US cents to 78.50 US cents.

“The CAD is a moderate out-performer through the overnight session but gains are relatively limited and spot is holding within yesterday’s range,” Shaun Osborne, chief FX strategist with Scotiabank, said. “The CAD has, however, gained nearly 1.4 per cent on the week against a generally softer USD.”

There were no major economic releases on Friday’s calendar. Traders are now looking ahead to the next week’s release of the latest Canadian inflation figures.

On world markets, the U.S. dollar index was up 0.2 per cent at 105.28, after four days of losses that have put it on track for a weekly decline of more than 1 per cent, according to figures from Reuters.

The greenback was up 0.3 per cent against the yen at 133.345 early Friday morning.

The British pound was down 0.3 per cent at US$1.2175.

The euro was down 0.2 per cent at $1.0295.

In bonds, the yield on the U.S. 10-year note was little changed at 2.878 per cent in the predawn period.

More company news

Aimia Inc. reported a net loss of $35.2-million in its second quarter, compared with a profit of $3.1-million in the same quarter last year. The investment holding company says the loss is mainly due to a $24-million unrealized loss on its investment portfolio and an $8.8-million non-cash equity pick-up of its share of Kognitiv’s net loss. Aimia CEO Phil Mittleman says the negative performance of the company’s investment portfolio in the quarter was related to a global decline in equity values and COVID-related lockdowns in China.

Johnson & Johnson will stop selling talc-based baby powder globally in 2023, the drug maker said on Thursday, more than two years after it ended U.S. sales of a product that drew thousands of consumer safety lawsuits. “As part of a worldwide portfolio assessment, we have made the commercial decision to transition to an all cornstarch-based baby powder portfolio,” it said, adding that cornstarch-based baby powder is already sold in countries around the world.

Economic news

(830 am ET) Canada construction investment for June.

(10 am ET) U.S. import prices for July.

(10 am ET) U.S. University of Michigan consumer sentiment for August.

With Reuters and The Canadian Press