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Equities

Canada’s main stock index opened higher Monday, drawing support from improved crude and gold prices. On Wall Street, key indexes also jumped in early trading as markets wade into earnings season.

At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 283.57 points, or 1.55 per cent, at 18,609.92.

The Dow Jones Industrial Average rose 424.8 points, or 1.43 per cent, at the open to 30,059.58. The S&P 500 rose 55.6 points, or 1.55 per cent, at the open to 3,638.65, while the Nasdaq Composite rose 254.3 points, or 2.46 per cent, to 10,575.647 at the opening bell.

“Traders are going to remain focused on the big earnings reports which will be rolling in this week,” Naeem Aslam, chief market analyst with AviTrade, said in an early note.

“When it comes to earnings, the focus is one important factor and that is how much of a downward revision we are going to see in their outlooks, given that inflation is still very anchored in its place.”

Ahead of Monday’s opening bell, Bank of America reported its latest results. Last week, JPMorgan and Wells Fargo each reported solid results while Morgan Stanley’s trading revenue numbers disappointed, Mr. Aslam said. Goldman Sachs is scheduled to report on Tuesday.

Bank of America said net profit applicable to common shareholders was US$6.6-billion, or 81 US cents a share, for the quarter ended Sept. 30, compared with US$7.3-billion, or 85 US cents a share, a year earlier. Still, profit in the latest quarter topped market forecasts, which had called for earnings per share of about 77 cents. Bank of America shares gained more than 4 per cent in early trading in New York.

Later in the week, Wall Street will get results from big names like Netflix, Tesla and IBM.

Monday's analyst upgrades and downgrades

In this country, the Bank of Canada releases its business outlook and consumer expectations surveys ahead of the central bank’s Oct. 26 policy announcement. The reports are due at 10:30 a.m. ET.

“Changes to inflation expectations will be a focal point in today’s BoC’s Business Outlook Survey as we look for hints on how much further the central bank will go with interest rate hikes,” RBC Capital Markets, LLC Daria Parkhomenko, vice president, RBC Capital Markets, said.

“Longer-run price expectations likely ticked lower in the latest update, with separate surveys from the Canadian Federation of Independent Businesses suggesting that wage and price plans already peaked earlier this summer.”

Later in the week, Statistics Canada releases September inflation figures. Economists are expecting to see the annual rate of inflation tick lower to 7 per cent

“Measures of ‘core’ inflation were likely stickier, with year-over-year price growth excluding food and energy products expected to increase in September, and the BoC’s preferred ‘median’ and ‘trim’ core CPI measures are not expected to repeat the small dip in August,” Ms. Parkhomenko said.

“Core inflation isn’t likely to meaningfully slow until December.”

Overseas, the pan-European STOXX 600 was up 1.1 per cent by midday. Britain’s FTSE 100 advanced 0.73 per cent after U.K. Treasury chief Jeremy Hunt reversed most of an economic package announced by the government just weeks ago, including a planned cut to income tax. In a bid to soothe turbulent financial markets, Hunt said he was scrapping “almost all” the tax cuts announced last month and signaled public spending cuts are on the way, The Associated Press reported.

Germany’s DAX and France’s CAC 40 were up 1.21 per cent and 1.08 per cent, respectively.

In Asia, Japan’s Nikkei fell 1.16 per cent. Hong Kong’s Hang Seng added 0.15 per cent.

Commodities

Crude prices advanced in early going, helped by China’s decision to underpin its economy by rolling over liquidity measures.

The day range on Brent was US$91.24 to US$93.04 in the early premarket period. The range on West Texas Intermediate was US$85.18 to US$86.92.

Reuters reported early Monday that China’s central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged for a second month, a move analysts suggest could indicate the bank intends to maintain loose monetary policy.

“Beijing should provide more economic stimulus, focusing on supporting consumption rather than investing,” Stephen Innes, managing partner with SPI Asset Management, said.

“Oil should run with that.”

In other commodities, gold prices gained, helped by a pause in the U.S. dollar rally.

Spot gold rose 0.4 per cent to US$1,648.91 per ounce. Gold posted its biggest weekly decline since July last week, Reuters reported.

U.S. gold futures were up 0.4 per cent at US$1,655.30.

Currencies

The Canadian dollar was firmer in early going while its U.S. counterpart took a breather in its rally against other major currencies.

The day range on the loonie is 71.95 US cents to 72.46 US cents.

Traders will get the Bank of Canada business outlook and consumer expectations surveys just after the markets open on Monday.

On world markets, the U.S. dollar was little changed on the day, trading around 113. The euro hovered at US$0.9728, up 0.1 per cent, while the Swiss franc gained 0.3 per cent against the U.S. dollar to hold at 1.0025 francs, having hit parity on Friday, according to figures from Reuters.

The U.S. dollar index eased to 112.93.

Britain’s pound rose against the U.S. dollar and the euro, gaining 1.3 per cent and 0.7 per cent, respectively, shortly after it was announced that Britain’s new finance minister would reserve most of a package of tax cuts in a bid to calm markets.

In bonds, the yield on the U.S. 10-year note was down slightly at 3.957 per cent in the predawn period.

More company news

Canada’s biggest grocer is freezing prices on all its No Name products until next year as double-digit food inflation sends grocery bills spiralling. Loblaw Companies Ltd. says it has locked in prices of the popular house brand, which includes more than 1,500 grocery items, until Jan. 31, 2023. In a letter shared with customers Monday, Loblaw chairman and president Galen G. Weston says the price of an average basket of groceries is up about 10 per cent this year with some items like apples, soup and chips up even more. -The Canadian Press

CACEIS, the asset servicing business owned by French bank Credit Agricole and Spanish bank Santander, has struck a preliminary deal to buy the European asset servicing business of RBC Investor Services. The acquisition, due to be completed by the end of the third quarter in 2023, would result in CACEIS having about 4.8 trillion euros ($4.7-trillion) worth of assets under custody and 3.5 trillion euros of assets under administration, CACEIS said on Monday. - Reuters

Economic news

(8:30 a.m. ET) U.S. Empire State Manufacturing Survey for October.

(10:30 a.m. ET) Bank of Canada’s Outlook Survey and Survey of Consumer Expectations for Q3 is released.

(4 p.m. ET) Bank of Canada Senior Governor Carolyn Rogers speaks at the 25th anniversary event for Toronto Centre.

With Reuters and The Canadian Press

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