Equities
Canada’s main stock index jumped at Tuesday’s opening bell alongside gains in crude prices. On Wall Street, key indexes were also up in early trading with traders awaiting tomorrow’s Federal Reserve meeting, looking for signals that rate hikes could moderate in the months ahead.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 251.31 points, or 1.29 per cent, at 19,677.45.
In the U.S., the Dow Jones Industrial Average rose 129.84 points, or 0.40 per cent, at the open to 32,862.79.
The S&P 500 opened higher by 29.81 points, or 0.77 per cent, at 3,901.79, while the Nasdaq Composite gained 166.59 points, or 1.52 per cent, to 11,154.74 at the opening bell.
The Fed’s Wednesday policy decision remains firmly in focus.
“While a 75 basis point hike looks locked in tomorrow, the messaging is what investors are interested in,” OANDA senior analyst Craig Erlman said.
“Despite inflation remaining at eye-watering levels, there’s a growing belief that the central bank will signal a desire to ease off the brake over the following few meetings starting with a 50-basis-point hike in December.”
He said, while the Fed has been clear that a soft landing for the economy is preferable, getting inflation under control is its primary focus.
“The question is whether the central bank believes its efforts will achieve that or if more needs to be done,” he said.
Tuesday's analyst upgrades and downgrades
In this country, investors will hear from Bank of Canada governor Tiff Macklem and senior deputy governor Carolyn Rogers when they appear before the Standing Senate Committee on Banking, Commerce and the Economy in Ottawa. The appearance is set for 6:30 p.m. ET. The appearance comes a week after the Bank of Canada surprised markets by raising interest rates by 50 basis points. Many economists had been expecting another 75-point increase.
On the corporate side, The Globe’s Irene Galea reports a federal judge has asked Rogers Communications Inc. and Shaw Communications Inc. to address proposals from Canada’s anti-competition watchdog to resolve a dispute over their $26-billion takeover deal, suggesting a compromise could be reached before the case heads to an appeal hearing.
On the earnings front, Canadian investors get results from auto-parts maker Martinrea and Thomson Reuters. On Wall Street, Pfizer, Uber Technologies and Eli Lilly are among the companies set to report.
Overseas, the pan-European STOXX 600 was up 1.23 per cent at midday. Britain’s FTSE 100 gained 1.39 per cent. Germany’s DAX and France’s CAC 40 advanced 1.23 per cent and 1.65 per cent, respectively.
In Asia, Japan’s Nikkei closed up 0.33 per cent. Hong Kong’s Hang Seng jumped 5.23 per cent
Commodities
Crude prices rose, with a weaker U.S. dollar and a positive outlook from OPEC helping offset about continued concerns over the impact of COVID-19 restrictions in China on demand.
The day range on Brent was US$92.33 to US$94.74 in the predawn period. The range on West Texas Intermediate was US$85.92 to US$88.24. Both benchmarks lost more than 1 per cent on Monday.
“OPEC released its 2022 oil market report on Monday and sees demand continuing to grow in the coming years,” OANDA’s Craig Erlman said in a note.
“That’s despite the economic headwinds in the near term that drove its controversial two million barrel cut last month. Among other things, the report highlighted the need for more investment, the strengthening of demand due to the shift from focusing on the transition to energy security, and a much later peak in demand.”
Also helping underpin prices was a dip in the U.S. dollar, which pulled back from a one-week high against a group of currencies ahead of Wednesday’s Fed policy decision.
On the downside, COVID-19 curbs in China forced the temporary closure of Disney’s Shanghai resort on Monday and have spurred worries of lower fuel demand in the world’s top crude oil importer as it persists with its zero-COVID policy, Reuters reported.
In other commodities, gold prices rose.
Spot gold was up 0.5 per cent at US$1,641.43 per ounce by early Tuesday morning, having earlier touched its lowest level since Oct. 21.
U.S. gold futures rose 0.1 per cent at US$1,642.20.
Currencies
The Canadian dollar was higher amid positive risk sentiment and advancing crude prices while its U.S. counterpart pulled back ahead of Wednesday’s Fed decision.
The day range on the loonie was 73.36 US cents to 73.85 US cents in the early premarket period.
Canadian investors will hear from Bank of Canada governor Tiff Macklem later in the day.
On world markets, the U.S. dollar index, which measures the greenback against six rivals, slid 0.48 per cent to 111.02 on Tuesday after advancing 0.79 per cent on Monday, according to figures from Reuters.
Britain’s pound rose 0.55 per cent to US$1.1529 as traders awaited the Bank of England meeting later in the week, after dropping more than 1 per cent on Monday. The euro rallied 0.47 per cent to US$0.9923, Reuters reported.
More company news
BP more than doubled its third-quarter profit from a year earlier to $8.15-billion, lifted by strong natural gas trading, as it expanded its share buybacks by $2.5-billion amid rising calls to increase taxes on the energy sector. The London-based company joins rivals including Shell, Exxon Mobil and TotalEnergies which also reported bumper profits last week that sparked calls from politicians to hit the sector with new windfall taxes to help governments with soaring energy bills. -Reuters
Thomson Reuters Corp reported higher third-quarter revenue and operating profit on Tuesday, helped by gains in its three biggest divisions, and stuck to its forecasts for this year and next. The Toronto-based news and information company recorded $1.57-billion in sales during the quarter, up 3%, which compared with expectations of $1.59-billion. Operating earnings jumped 41% to $398-million. -Reuters
Uber Technologies Inc on Tuesday forecast fourth-quarter operating profit above Wall Street estimates, betting on rising demand for its rides as customers resume spending more on travel and tight control on costs. With cities reopening and travel booming, consumers are shifting their budgets to services, Chief Executive Dara Khosrowshahi said, compared to the two years of COVID-led lockdowns when they had limited spending to basic needs. -Reuters
Pfizer Inc on Tuesday raised its full-year estimates for sales of its COVID-19 vaccine by $2-billion to $34-billion, encouraged by demand for its new bivalent booster shots. The company maintained its full-year sales forecast for COVID-19 pill Paxlovid at $22-billion. -Reuters
Johnson & Johnson said on Tuesday it will buy heart pump maker Abiomed Inc in a deal valued at $16.6-billion to boost its cardiovascular devices business. The upfront payment of $380 per share represents a 50.7% premium to Abiomed’s last closing price. Shares of Abiomed surged 48% in premarket trade. -Reuters
Economic news
(9:30 a.m. ET) Canada’s S&P Global Manufacturing PMI for October.
(9:45 a.m. ET) U.S. S&P Global Manufacturing PMI for October.
(10 a.m. ET) U.S. ISM Manufacturing PMI for October.
(10 a.m. ET) U.S. construction spending for September.
(10 a.m. ET) U.S. Job Openings and Labour Turnover Survey for September.
(6:30 p.m. ET) Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers appear before the Standing Senate Committee on Banking, Commerce and the Economy.
With Reuters and The Canadian Press
Terry Weber