Skip to main content

Equities

Canada’s main stock index edged higher at Friday’s opening bell, helped by gains in commodities-linked stocks. On Wall Street, key indexes were down and looked set for a losing week after fresh wholesale inflation came in higher than expected.

At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 35.33 points, or 0.18 per cent, at 20,004.52.

In the U.S., the Dow Jones Industrial Average fell 34.77 points, or 0.10 per cent, at the open to 33,746.71. The S&P 500 opened lower by 9.34 points, or 0.24 per cent, at 3,954.17, while the Nasdaq Composite dropped 43.83 points, or 0.40 per cent, to 11,038.17 at the opening bell.

“The main focus of attention continues to be on next week’s central bank meetings of the Federal Reserve, ECB and Bank of England, and guidance on the likely glide path for rates heading into 2023,” Michael Hewson, chief market analyst with CMC Markets U.K., said.

“Given [Fed chair Jerome] Powell’s comments at the Brookings Institute last week it seems certain that the Fed will be slowing the pace of rate rises next week to a 50-basis-point hike.”

Early Friday, the U.S. Labor Department showed producer prices rose at an annual rate of 7.4 per cent in November. That was down from 8.1 per cent in October but ahead of forecasts, which had pegged the November number closer to 7.2 per cent.

The Fed decision is due next Wednesday afternoon. A fresh reading on the U.S. consumer price index is also scheduled for next week.

In Canada, Bank of Canada deputy governor Sharon Kozicki said the central bank could pause interest rate hikes as early as next month as it shifts to a more “data-dependent” approach to monetary policy, although the bank is still prepared to be “forceful” if necessary, The Globe’s Mark Rendell reports

“We are moving from how much to raise interest rates to whether to raise interest rates,” Ms. Kozicki said in a speech to the Urban Development Institute of Quebec in Montreal on Thursday afternoon.

On Wednesday, the Bank of Canada delivered its seventh rate hike of 2022, increasing borrowing costs by half a percentage point.

Friday's analyst upgrades and downgrades

On the corporate side, shares of B.C.-based Lululemon Athletica were down 12 per cent in early trading on the Nasdaq after the retailer forecast revenue and profit below analysts’ forecasts for the holiday quarter. The company forecast fourth-quarter revenue between US$2.61-billion and US$2.66-billion, compared to analysts’ estimates of US$2.65-billion, according to IBES data from Refinitiv. Lululemon expects current-quarter profit between US$4.20 and US$4.30 per share, while analysts estimate US$4.30.

Early Friday, Laurentian Bank and Roots will both reported their latest results.

Roots said it earned $2.2-million or 5 cents a share in the latest quarter, down from $10.8-million or 25 cents a year earlier. Sales were down 8.5 per cent in the quarter.

“We are continuing to strategically manage our core inventory to maintain our promotional discipline; however, we expect these factors to continue impacting our sales and margins in the near term,” Chief executive Meghan Roach said in a release.

Roots shares fell about 8 per cent on Friday morning in Toronto.

Laurentian, meanwhile, reported adjusted net income was $57.8-million or $1.31 compared with $47.8-million or $1.06 a year earlier. Analysts had expected earnings per share by that measure of $1.24 cents a share in the latest quarter, according to financial markets data firm Refinitiv. Laurentian shares gained more than 6 per cent in morning trading.

Overseas, the pan-European STOXX 600 was up 0.67 per cent by midday. Britain’s FTSE 100 edged up 0.06 per cent. Germany’s DAX added 0.70 per cent while France’s CAC 40 gained 0.35 per cent.

In Asia, Japan’s Nikkei closed up 1.18 per cent. Hong Kong’s Hang Seng added 2.32 per cent.

Commodities

Crude prices saw early gains but were still on track for sharp weekly losses as global recession fears continue to weigh on demand.

The day range on Brent was US$75.95 to US$77.09 in the early premarket period. The range on West Texas Intermediate was US$71.32 to US$72.48.

Both benchmarks were on track for weekly declines of about 10 per cent. That would be the worst weekly showing for WTI since spring.

“Trend and momentum indicators remain comfortably bearish, inviting traders to sell the tops for a further fall in oil prices in the short run,” Swissquote senior analyst Ipek Ozkardeskaya said.

“A fall below the $70 psychological level could pave the way for a further decline to US$65...But the price should rebound back above US$82 sometime in the first quarter of next year.”

Prices got a lift on Thursday on news that TC Energy’s Keystone pipeline had been shuttered after crude was released into a creek in the U.S. However, the gain was temporary with analysts expecting the situation to be resolved fairly quickly.

In other commodities, gold prices were up ahead of fresh U.S. inflation figures and the Fed decision next week.

Spot gold was up 0.3 per cent at US$1,794.49 per ounce by early Friday morning. Prices are down about 0.2 per cent on the week so far. U.S. gold futures rose 0.3 per cent to $1,807.10.

“Gold prices are flirting at the $1800 level as the dollar softens ahead of a key round of inflation data,” OANDA senior analyst Ed Moya said.

Currencies

The Canadian dollar was down in early going while its U.S. counterpart took a breather against a group of world currencies.

The range on the loonie was 73.29 US cents to 73.70 US cents in the early premarket period.

There were no major Canadian economic reports due Friday. On Thursday afternoon, Bank of Canada governor Sharon Kozicki signalled during remarks in Montreal that the end of an aggressive hiking cycle could be near. However, she also indicated that central bank was still ready to move forcefully if needed.

On world markets, the U.S. dollar index, which measures the greenback against a selection of currencies, was last broadly flat at 104.780.

The index is up about 9.5 per cent for the year so far, but down more than 6 per cent for the fourth quarter, according to figures from Reuters.

The euro was little changed at US$1.05555, close to its six-month high hit at the start of the week and on track for a third straight week of gains.

Britain’s was largely unchanged on the day at US$1.22460 , not far off Monday’s six-month high of $1.2345, Reuters reported.

In bonds, the yield on the benchmark U.S. 10-year note dipped to 3.474 per cent in the predawn period.

More company news

Pakistan’s Supreme Court endorsed on Friday a settlement for Barrick Gold to resume mining at the Reko Diq project, one of the world’s largest underdeveloped sites of copper and gold deposits, it said in an order. The endorsement was a condition of the settlement for Barrick to resume work on the project in the southwestern province of Balochistan, bordering Afghanistan and Iran, in which it will invest US$10-billion. -Reuters

Crescent Point Energy Corp. says it has signed an agreement with Paramount Resources Ltd. to acquire additional Kaybob Duvernay assets for $375-million. The Calgary oil and gas company says those assets include 130 net drilling locations across almost 65,000 net acres of Crown land. They produce more than 4,000 barrels of oil equivalent a day and include a gas plant, pipelines, water infrastructure and seismic data. -The Canadian Press

Costco Wholesale Corp reported first-quarter results that missed analysts’ estimates, with surging inflation pushing consumers to cut back spending and as operating expenses increased for the company. Costco’s total revenue for the first quarter was US$54.44-billion, compared with estimates of US$54.64-billion, according to Refinitiv IBES data. -Reuters

The U.S. Federal Trade Commission filed a complaint on Thursday aimed at blocking tech giant Microsoft’s US$69-billion bid to buy “Call of Duty” games maker Activision, over concerns the deal would thwart competition by denying rivals access to popular gaming content. Microsoft, which owns the Xbox, said in January 2022 that it would buy Activision for US$68.7-billion in the biggest gaming industry deal in history. Microsoft President Brad Smith said they would fight the FTC. “While we believed in giving peace a chance, we have complete confidence in our case and welcome the opportunity to present our case in court,” he said. -Reuters

Economic news

(8:30 a.m. ET) U.S. PPI for November.

(10 a.m. ET) U.S. wholesale trade for October.

(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for December (preliminary reading).

With Reuters and The Canadian Press

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe