Equities
Canada’s main stock index added to the previous session’s gains in early going, tracking firmer global market sentiment. On Wall Street, key indexes were also up at the opening bell as traders weigh results from some of the biggest U.S. banks.
At 9:43 a.m. ET, 01:44 p.m., the Toronto Stock Exchange’s S&P/TSX composite index was up 0.5% and all set to end the week on a positive note.
In the U.S., the Dow Jones Industrial Average rose 153.5 points, or 0.51 per cent, at the open to 30192.21. The S&P 500 rose 20.5 points, or 0.56 per cent, at the open to 3690.41, while the Nasdaq Composite rose 93.7 points, or 0.88 per cent, to 10742.814 at the opening bell.
“The next few weeks may simply be a question of how investors respond to earnings season which kicks off today with JP Morgan et al reporting,: OANDA senior analyst Craig Erlam said.
“Needless to say, we’re going into this season with very low expectations on both the top and bottom lines and the outlook. It’s just a question of how pessimistic firms are going to be and how willing investors are to turn a blind eye.”
Friday's analyst upgrades and downgrades
Friday morning, traders will got results from some of the biggest U.S. lenders, including JPMorgan, Citigroup and Morgan Stanley.
JPMorgan reported a drop in third-quarter profit on Friday, as rising U.S. interest rates hit the appetite for deals and weighed on its investment-banking arm. Profit for the quarter ended Sept. 30 was US$9.74-billion, or US$3.12 per share, compared with US$11.69-billion, or US$3.74 per share, a year earlier. Analysts had been looking for earnings per share in the latest quarter of US$2.88. Shares were up 3.6 per cent in morning trading in New York.
Morgan Stanley also reported a fall in third-quarter profit. The bank reported a profit of US$2.49-billion, or US$1.47 per share, for the quarter ended Sept. 30, compared with US$3.58-billion, or US$1.98 per share, a year earlier.
U.S. investors also got retail sales figures before the opening bell. The report showed U.S. retail sales were flat in September. Economists had been expecting an increase of 0.2 per cent.
In this country, Canada’s housing market will be in focus with the release September home sales from the Canadian Real Estate Association. CREA said national home sales were down 3.9 per cent on a monthly basis in September and down 32.2 per cent compared with the same month a year earlier. The MLS home price index fell 1.4 per cent month-over-month but was up 3.3 per cent year-over year.
Canadian markets also got August factory sales figures. Statistics Canada says sales for the month fell 2 per cent, roughly in line with the 1.8-per-cent decline the agency had forecast earlier. Wholesale sales for the month were up 1.4 per cent.
Overseas, the pan-European STOXX 600 was up 1.15 per cent at midday. Britain’s FTSE 100 gained 0.87 per cent. Multiple reports suggested early Friday that British Prime Minister Liz Truss has fired her finance minister Kwasi Kwarteng, shortly before she is expected to scrap parts of his economic package in a bid to survive the market and political turmoil gripping the country. Mr. Kwarteng later confirmed he was exiting the post.
Germany’s DAX and France’s CAC 40 advanced 1.03 per cent and 1.51 per cent, respectively.
In Asia, Japan’s Nikkei jumped 3.25 per cent. Hong Kong’s Hang Seng closed up 1.21 per cent.
Commodities
Crude prices were lower and looked set for a weekly decline as global recession worries come up against tighter supply.
The day range on Brent was US$93.75 to US$95.11 in the premarket period. The range on West Texas Intermediate was US$88.39 to US$89.73.
Both benchmarks were down about 4 per cent for the week, following two weeks of gains.
“The output cut from OPEC+ last week triggered a surge in prices but that has partially been offset by the increasingly dire forecasts for the economy which will naturally weigh on demand,” OANDA senior analyst Craig Erlam said.
“The alliance will no doubt be pleased with oil trading back in the $90-$100 range, the question is whether the U.S. will. Or if another coordinated SPR [strategic petroleum release] release could be on the cards.”
Crude prices were also supported by a steep drawdown in U.S. distillate stocks, though there has been a larger than expected surge in U.S. crude oil in storage, Reuters reported.
Gold prices edged higher, helped by a pullback in the U.S. dollar.
Spot gold rose 0.3 per cent to US$1,670.00 by early Friday morning. Prices were down more than 1 per cent so far in the week.
U.S. gold futures were flat at US$1,676.60.
Currencies
The Canadian dollar was slightly weaker while its U.S. counterpart held steady against a basket of world currencies.
The day range on the loonie was 72.50 US cents to 72.97 US cents.
Canadian investors get August wholesale and manufacturing sales early Friday.
On world markets, the U.S. dollar index was last up very slightly at 112.62, having fallen 0.6 per cent during the previous session despite expectations the Federal Reserve will deliver another outsized rate hike at its next meeting.
After making steep gains on Thursday, the pound was last down 0.27 per cent at US$1.1301, according to figures from Reuters.
The Australian dollar was up 0.42 per cent against the U.S. dollar at US$0.6322, coming off a two-and-a-half year low seen a day earlier.
In bonds, the yield on the 10-year note was slightly lower at 3.92 per cent in the predawn period.
More company news
Citigroup Inc reported a 25-per-cent drop in third-quarter profit as its investment banking business struggled to cope with a slump in dealmaking. Net profit was $3.5-billion, or $1.63 per share, in the three months ended Sept. 30, compared with $4.6-billion, or $2.15 per share, a year earlier. Analysts on average had expected a profit of $1.42 per share, according to Refinitiv IBES data. -Reuters
Faux-meat maker Beyond Meat Inc on Friday slashed its annual revenue forecast and said it was cutting about 200 jobs, or 19% of its total workforce. The company now expects full-year revenue to be in the range of about $400-million to $425-million compared with previous expectations of between $470-million to $520-million. -Reuters
Wells Fargo & Co on Friday reported a decline in profit for the third quarter as the bank set aside more money in preparation for a hit from a potential economic slowdown. The fourth-largest U.S. lender reported a profit of $3.53-billion, or 85 cents per share, for the quarter ended Sept. 30, compared with $5.12-billion, or $1.17 per share, a year earlier. -Reuters
Economic news
(830 am ET) Canada manufacturing sales for August.
(830 am ET) Canada wholesale trade for August.
(9 am ET) Canada existing home sales for September.
(9am ET) MLS Home Price Index for September.
(830 am ET) U.S. retail sales for September.
(830 am ET) U.S. import prices.
(10 am ET) U.S. business inventories for August.
(10 am ET) U.S. University of Michigan Consumer Sentiment for October.
With Reuters and The Canadian Press
Terry Weber