Equities
Canada’s main stock index edged higher at Friday’s opening bell, helped by a better-than-forecast reading on economic growth in this country. On Wall Street, the tech-heavy Nasdaq came under early pressure in the wake of a disappointing forecast from Amazon although gains in Apple stock helped ease the pain.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 4.39 points, or 0.02 per cent, at 19,356.5.
The Nasdaq Composite dropped 26.47 points, or 0.25 per cent, to 10,766.20 at the opening bell. The Dow Jones Industrial Average rose 171.03 points, or 0.53 per cent, at the open to 32,204.31 while the S&P 500 opened higher by 0.96 points, or 0.03 per cent, at 3,808.26.
Early Friday, Amazon stock was down about 10 per cent in early trading after the online retail behemoth posted weaker-than-forecast revenue in the latest quarter and issued a disappointing sales forecast for the holiday period.
Amazon said it expects fourth-quarter revenue to be between US$140-billion and US$148-billion, up 2 per cent to 8 per cent from a year earlier. Analysts had been expecting revenue for the quarter of US$155.15-billion.
“We can observe from Amazon’s earnings that consumers in the U.S. and around the globe are not in a good position at all; they have been forced to cut back on their spending,” AviTrade chief market analyst Naeem Aslam said.
“In simple words, Amazon’s earnings report had the recession bells ringing loud and left no doubt that things are becoming ugly in the U.S.”
Friday's analyst upgrades and downgrades
Apple shares, meanwhile, were up about 6 per cent in the premarket after the company reported revenue and profit in the latest quarter above Wall Street forecasts. However, iPhone revenue in the quarter came up short of market forecasts at US$42.63-billion, up more than 9 per cent from a year earlier but also below the US$43.21-billion analysts had been expecting, according to Refinitiv IBES.
In this country, markets got results from Air Canada ahead of the start of trading. As well, Imperial Oil reports its latest quarter.
Air Canada said its quarterly revenue more than doubled on strong summer demand. This country’s largest carrier posted a revenue of $5.32-billion in the third quarter, compared with $2.10-billion during the same period a year earlier.
On the economic side, Statistics Canada said GDP advanced 0.1 per cent in August, slightly better than the flat reading the agency had earlier forecast. Statscan also said early estimates now suggest the economy grew at an annual rate of 1.6 per cent in the third quarter, down from an annual rate of 3.3 per cent in the second quarter.
The numbers come just days after the Bank of Canada delivered its sixth consecutive interest rate increase.
Overseas, the pan-European STOXX 600 was down 0.64 per cent in morning trading. Britain’s FTSE 100 lost 0.56 per cent. Germany’s DAX and France’s CAC 40 were off 0.77 per cent and 0.65 per cent, respectively.
In Asia, Japan’s Nikkei finished down 0.88 per cent. Hong Kong’s Hang Seng dropped 3.66 per cent on weakness in tech stocks to hit its lowest level since 2009.
Commodities
Crude prices were weaker in early going on news that China has stepped up efforts to curb the spread of COVID-19.
The day range on Brent was US$95.69 to US$96.89 in the early premarket period. The range on West Texas Intermediate was US$87.58 to US$88.76. Both benchmarks are on track for weekly gains. Early Friday, Brent was headed to a weekly gain of more than 2 per cent while WTI was up more than 3 per cent on the week.
Friday’s downward pressure came after China continued with COVID-19 curbs, locking down districts and ordering mass testing in some areas.
According to Reuters China reported 1,506 new COVID-19 infections on Oct. 27, the National Health Commission said on Friday, up from 1,264 new cases a day earlier.
“Oil prices are lower as Chinese cities double down on Covid curbs,” Stephen Innes, managing partner with SPI Asset Management, said in a note.
“Guangzhou, China’s fourth-biggest city by economic output, sealed up more streets and neighbourhoods on Thursday as new areas were deemed high-risk in a COVID resurgence that persisted into its fourth week, Reuters reported.”
In other commodities, gold prices were down as the U.S. dollar advanced ahead of next week’s Federal Reserve rate decision.
Spot gold slipped 0.7 per cent to US$1,651.52 per ounce early Friday morning, while U.S. gold futures were down 0.6 per cent at US$1,656.10.
Currencies
The Canadian dollar was weaker early Friday while its U.S. counterpart looked to rebound from declines earlier in the week as traders look ahead to next week’s Fed interest rate announcement.
The day range on the loonie was 73.36 US cents to 73.94 US cents in the predawn period.
The loonie saw little movement on the latest Canadian GDP figures, which showed the economy grew by 0.1 per cent in August.
On works markets, the U.S. dollar was last up 0.8 per cent against the yen at 147.43 after the Bank of Japan left its target for short-term interest rates unchanged.
The U.S. dollar was also firmer on both Britain’s pound which was down 0.4 per cent at US$1.1516, and the euro, which traded down 0.2 per cent at US$0.9941, according to figures from Reuters.
The dollar was also firmer against the Swiss franc the Australian dollar and the Norwegian and Swedish crowns, Reuters reported.
In bonds, the yield on the U.S. 10-year note was higher at 4.00 per cent in the early premarket period.
More company news
The Globe’s Alexandra Posadzki reports the $26-billion merger between Rogers Communications Inc. and Shaw Communications Inc. is headed for a lengthy hearing at the Competition Tribunal after mediation talks failed to resolve the Competition Bureau’s objections to the deal. Rogers, Shaw and Quebecor Inc. said in a joint statement issued following the negotiations, which took place in Ottawa on Thursday, that they are “disappointed with this outcome.” “The Bureau’s unwillingness to meaningfully engage unduly delays lower wireless prices for Canadian consumers,” the companies said. “We remain committed to completing this pro-competitive series of transactions and are confident in the strength and merits of our case in front of the Competition Tribunal, including the many benefits of these transactions to Canadians.”
Imperial Oil Ltd reported a jump in third-quarter profit, on the back of higher energy prices amid tighter global supplies. The Calgary, Alberta-based company’s net earnings rose to $2.03-billion, or $3.24 per share, in the three months ended Sept. 30, from $908-million, or $1.29 per share, a year earlier.
Elon Musk became Twitter Inc’s owner on Thursday, firing top executives and providing little clarity over how he will achieve the lofty ambitions he has outlined for the influential social media platform. “The bird is freed,” he tweeted, referencing Twitter’s bird logo in an apparent nod to his desire to see the company have fewer limits on content that can be posted. -Reuters
Exxon Mobil Corp on Friday smashed expectations as soaring energy prices fuelled a record-breaking quarterly profit, nearly matching that of tech giant Apple. Its $19.66-billion third-quarter net profit far exceeded recently raised Wall Street forecasts as sky-rocketing natural gas and high oil prices put its earnings within reach of Apple’s $20.7-billion net for the same period. -Reuters
Chipmaker Intel Corp on Thursday cut its full-year profit and revenue forecast and warned it would lay off staff, but a stronger-than-expected performance at its personal computers segment helped send shares higher. Intel shares jumped over 5% in after-hours trade. They have slumped roughly 47% so far this year, underperforming both the S&P 500 index and the Philadelphia SE Semiconductor index. Chief Executive Pat Gelsinger said the cut to the fourth quarter outlook reflected economic uncertainty expected to last into next year, and that the company was taking time to ramp up sales into data centers, which dropped 27% in the third quarter. -Reuters
Economic news
(8:30 a.m. ET) Canada’s monthly GDP for August.
(8:30 a.m. ET) U.S. personal spending and income for September.
(8:30 a.m. ET) U.S. core PCE price index for September.
(8:30 a.m. ET) U.S. employment cost index for Q3.
(10 a.m. ET) U.S. University of Michigan consumer sentiment for October.
(10 a.m. ET) U.S. pending home sales for September.
With Reuters and The Canadian Press