Equities
Canada’s main stock index was down at Wednesday’s opening bell with tech and energy shares under pressure. On Wall Street, key indexes were also in the red with the outcome of the U.S. midterm elections still up in the air.
At 9:38 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 117.17 points, or 0.6 per cent, at 19,543.14.
In the U.S., the Dow Jones Industrial Average fell 156.36 points, or 0.47 per cent, at the open to 33,004.47.
The S&P 500 opened lower by 17.17 points, or 0.45 per cent, at 3,810.94, while the Nasdaq Composite dropped 87.75 points, or 0.83 per cent, to 10,528.45 at the opening bell.
The U.S. political situation continues to influence sentiment, with control of the U.S. Congress and governorships of key swing states still undecided. The Globe’s Adrian Morrow and Nathan Vanderklippe report that Republicans were making modest gains in midterm elections but failing to achieve a hoped-for wave as a string of their election-denier candidates lost to President Joe Biden’s Democrats.
“The impact of the midterms will probably be short-lived, if impactful at all, as far as markets are concerned,” OANDA senior analyst Craig Erlam said.
“Investors are more focused on the inflation data on Thursday and whether that will pave the way for a slower pace of tightening in December and early next year,” he said in an early note. “There’s unease about the central bank’s views on the terminal rate but those could abate if we see a favourable inflation number tomorrow.”
Economists are looking for the annual rate of inflation in the United States to pull back to 8 per cent in October from 8.2 per cent in September.
Wednesday's analyst upgrades and downgrades
In this country, earnings continue to roll in with results this morning from Rogers Communications.
Rogers reported a 2-per-cent rise in quarterly revenue. The company’s total revenue rose to $3.74-billion in the third quarter compared to $3.67-billion a year earlier. Analysts on average were expecting a revenue of $3.73-billion in the most recent quarter, according to Refinitiv data.
The earnings come as competition hearings continue over Rogers’ proposed takeover of Shaw Communications Inc. On Tuesday, the Competition Tribunal heard that the Competition Bureau received more than 7,000 public comments regarding the proposed $26-billion merger, many of them expressing opposition to the deal.
Elsewhere, The Globe’s James Bradshaw and David Milstead report that a jury in a Minnesota bankruptcy court has found the U.S. arm of Bank of Montreal liable for US$564-million in damages in a lawsuit related to one of the largest Ponzi schemes in history, and the bank will take a $1.1-billion charge as it prepares to appeal the decision.
On Wall Street, Meta shares were up more than 7 per cent in early trading after Facebook’s parent company said it would lay off 13 per cent of its workforce or about 11,000 employees as it battles declining revenues and weakness across the tech sector.
Overseas, the pan-European STOXX 600 was down 0.61 per cent by midday. Germany’s DAX slid 0.73 per cent while France’s CAC 40 was off 0.49 per cent. Britain’s FTSE 100 lost 0.37 per cent.
In Asia, Japan’s Nikkei ended down 0.56 per cent. Hong Kong’s Hang Seng fell 1.2 per cent.
Commodities
Crude prices were weaker in early going after new figures showed a bigger-than-expected build in U.S. inventories.
The day range on Brent was US$94.70 to US$95.65 in the early premarket period. The range on West Texas Intermediate was US$88.14 to US$89.24. Both benchmarks lost about 3 per cent on Tuesday.
Prices came under pressure after figures from the American Petroleum Institute showed weekly U.S. crude inventories rose about 5.6 million barrels, much more than the 1.4 million barrels analysts had been forecasting.
Official U.S. government figures are due later Wednesday morning.
As well, a rebound in COVID-19 cases in China also continues to raise concerns about demand in one of the world’s top oil consumers.
COVID-19 cases in Guangzhou and other Chinese cities have surged, with millions of residents of the global manufacturing hub being required to have COVID-19 tests on Wednesday, Reuters reported.
“Rolling lockdowns in China, as COVID cases rebound, are catching oil traders leaning the wrong way,” Stephen Innes, managing partner with SPI Asset Management, said.
“Last week oil traders were diving into the trade that no one owned, long oil on an early China reopening,” he said. “With that narrative getting pushed back, coupled with a considerable build on U.S. inventory data, implying dimming US demand, the recessionary crews are back out in full force this morning in Asia.”
In other commodities, gold prices near the previous session’s one-month high on Wednesday as investors look ahead to Thursday’s U.S. inflation data.
Spot gold was little changed at US$1,712.87 per ounce by early Wednesday morning, while U.S. gold futures were flat at US$1,715.60.
Gold prices rose more than 2 per cent to breach the key US$1,700 level on Tuesday, according to figures from Reuters.
Currencies
The Canadian dollar was slightly weaker amid tentative risk sentiment while its U.S. counterpart firmed slightly against a group of currencies but remained down on the week.
The day range on the loonie was 74.27 US cents to 74.56 US cents.
There were no major Canadian economic reports due Wednesday.
On world markets, the U.S. dollar index, which weighs the greenback against a group of rival currencies, was up 0.28 per cent at 109.94 early Wednesday morning. The index is down about 1 per cent for the week so far, according to figures from Reuters.
The euro was little changed at US$1.0066, just off the US$1.0096 hit overnight, its highest since Sept. 13. The greenback also weakened to 145.17 yen in Asia trade, its lowest level against the Japanese currency this month, Reuters reported.
In bonds, the yield on the benchmark U.S. 10-year note nudged higher to 4.147 per cent in the predawn period.
More company news
TC Energy Corp reported an 8-per-cent rise in quarterly profit on Wednesday, as surging energy demand boosted the Canadian pipeline operator’s earnings from its businesses transporting natural gas. The Calgary-based company’s net income attributable to common shares stood at $841-million, or 84 cents per share, for the three months to Sept. 30, from $779-million, or 80 cents per share, a year earlier. -Reuters
Pot producer Canopy Growth reported a smaller second-quarter core loss, helped by higher sales and cost-cutting measures. The company posted an adjusted core loss of $78.1-million in the second quarter, compared with a loss of $162.6-million a year earlier. -Reuters
CGI Inc. says it earned a fourth-quarter profit of $362.4-million, up from $345.9-million in the same quarter last year as its revenue rose 8 per cent compared with a year ago. The business and technology consulting firm says the profit amounted to $1.51 per diluted share for the quarter ended Sept. 30, up from a profit of $1.39 per diluted share in the same quarter last year. Revenue for the three-month period totalled $3.25-billion, up from $3.01-billion a year earlier. -The Canadian Press
Walt Disney Co missed Wall Street earnings forecasts on Tuesday as the entertainment giant racked up more losses from its push into streaming video, sending its shares tumbling. The company gained more streaming customers than analysts had expected from July through September, but media investors increasingly focused on profits over streaming subscription numbers. Disney has spent billions to build its streaming options and compete with Netflix Inc and others. Its marquee service, Disney+, reported 164.2 million subscribers in the fiscal fourth quarter, surpassing Factset estimates of 161 million. The streaming unit, known as direct-to-consumer, lost $1.5-billion during the period. -Reuters
Economic news
(10 a.m. ET) U.S. wholesale trade for September.
With Reuters and The Canadian Press