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Equities

Canada’s main stock index was little changed at Friday’s opening bell after hitting its best level in more than five months during the previous session. On Wall Street, key indexes were mixed in an abbreviated trading day with Black Friday sales and interest rate speculation in the mix for traders.

At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 4.71 points, or 0.02%, at 20,348.78.

The Dow Jones Industrial Average rose 19.0 points, or 0.06 per cent, at the open to 34213.04. The S&P 500 fell 3.9 points, or 0.10 per cent, at the open to 4023.34, while the Nasdaq Composite dropped 54.3 points, or 0.48 per cent, to 11231 at the opening bell.

“We’re seeing subdued trading at the end of the week, with the absence of the U.S. leaving markets lacking any notable direction,” OANDA senior analyst Craig Erlam said.

“This isn’t really unusual and at the end of the week too, it really makes sense. Barring a flurry of big headlines from elsewhere, we could now see equity markets just drift into the weekend with investors already having an eye on next week.”

Global sentiment got a boost earlier in the week after minutes from the most recent Federal Reserve meeting suggested the U.S. central bank could soon pullback on the size of rate increases.

On Friday, retail stocks are in focus as Black Friday gets underway, although earlier rollouts of sales and concerns over the impact of high inflation on spending have taken some of the shine off the day.

“The Black Friday sales will paint a clearer picture of the health of the U.S. consumers, and their wallets in this inflationary environment,” Swissquote senior analyst Ipek Ozkardeskaya said in a recent note.

“Remember, good sales are good for the mood, but too good sales would fuel inflation expectations, and the Fed hawks, and may not be good for investor appetite.”

Friday's analyst upgrades and downgrades

In Canada, The Globe’s Jameson Berkow reports that Bay Street bankers who were bracing for major cuts to year-end bonuses can expect some delay to their disappointment, but the respite will likely be brief. Despite a dramatic drop in deal flow and volatile market conditions, compensation experts say a tight labour market and strong merger and acquisition activity in the mining and energy sectors have offset the need for outsized cuts to annual payments made in early December.

Overseas, the pan-European STOXX 600 was off 0.08 per cent by midday. Britain’s FTSE 100 edged up 0.18 per cent. Germany’s DAX and France’s CAC 40 slid 0.15 per cent and 0.08 per cent, respectively.

In Asia, Japan’s Nikkei closed down 0.35 per cent. Hong Kong’s Hang Seng lost 0.49 per cent amid weakness in tech shares.

Commodities

Crude prices were higher in thin trading but still looked set for a weekly loss as traders weigh continuing concerns about demand in China and the potential impact of Western price caps on Russian crude.

The day range on Brent was US$85.26 to US$86.69 in the early premarket period. The range on West Texas Intermediate was US$79.86 to US$79.62.

Both benchmarks are down about 2 per cent for the week and look set for a third consecutive weekly decline.

“With OPEC unlikely to stick out its neck, added supply tail risks are diminishing ahead of the OPEC+ meeting,” Stephen Innes, managing partner with SPI Asset management, said.

“Hence, oil is catching a bit of updraft. However, with the possibility of full-scale lockdowns in Beijing presenting a real-time overhang, I would be surprised to see traders holding too much weekend risk.”

Traders have been paying close attention to rising COVID-19 infections in China. China, the world’s second biggest crude consumer, reported a record high number of COVID-19 infections on Friday. Restrictions have been imposed in a number of regions, raising concerns about the impact on oil demand.

Meanwhile, on the Russian oil price cap, G7 and European Union diplomats have been discussing levels between US$65 and US$70 a barrel, with the aim of limiting revenue to fund Moscow’s military offensive in Ukraine without disrupting global oil markets, Reuters reports.

“If the cap is too high, Russian revenues will be less impacted and have little effect on Russian exports, but oil prices may fall,” Mr. Innes said.

“If the cap is too low, you create incentives for Russia to retrench production and oil prices rise.”

Elsewhere, gold prices looked headed for a positive week, helped by an easing U.S. dollar on the back of the latest Fed minutes.

Spot gold was little changed at US$1,755.13 per ounce by early Friday morning, having risen 0.4 per cent so far this week. U.S. gold futures advanced 0.5 per cent to US$1,755.00.

Currencies

The Canadian dollar was slightly lower in early going while its U.S. counterpart held near a three-month trough and looked set for a weekly decline against a group of world currencies.

The day range on the loonie is 74.78 US cents to 75.09 US cents.

“Risk appetite continues to exert a lot of influence over CAD moves versus the USD but our correlation matrix shows that commodity correlations are strengthening and this may represent something of a headwind for the CAD moving forward as investors consider Chinese growth risks and the U.S. recession threat,” Shaun Osborne, chief FX strategist with Scotiabank, said.

There were no major Canadian economic releases due on Friday.

On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, fell 0.05 per cent to 105.8.

The U.S. dollar took a hit this week on expectations that the Federal Reserve is set to soon scale back the size of interest rate hikes.

Against the U.S. dollar, the euro gained 0.1 per cent to US$1.0420, edging toward an over four-month high of US$1.0481 hit last week. The Japanese yen was unchanged on the day at 138.63 to the U.S. dollar, according to figures from Reuters.

More company news

Twitter will roll out verified gold and grey check marks as it relaunches the coveted blue check service next Friday, Chief Executive Officer Elon Musk said in a tweet, after holding off the rollout earlier this week. “Gold check for companies, grey check for governments, blue for individuals (celebrities or not). Painful, but necessary,” Musk said in a tweet. All verified accounts will be manually authenticated before the check is activated, Musk said. -Reuters

Economic news

Canada’s Fiscal Monitor for September.

With Reuters and The Canadian Press

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