Equities
Indexes in both Canada and the United States slid at Friday’s opening bell after new U.S. inflation data rattled investors nerves and added to ongoing rate worries.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 157.26 points, or 0.78 per cent, at 20,030.93.
In the U.S., the Dow Jones Industrial Average fell 154.72 points, or 0.47 per cent, at the open to 32,999.19. The S&P 500 opened lower by 39.08 points, or 0.97 per cent, at 3,973.24, while the Nasdaq Composite dropped 186.22 points, or 1.61 per cent, to 11,404.18 at the opening bell.
Just ahead of Friday’s opening bell, U.S. traders will got the latest reading on the Federal Reserve’s preferred measure of inflation with the release of the personal consumption expenditures index for January.
The index excluding food and energy rose 0.6 per cent for the month, more than the 0.5-per-cent increase economists had been forecasting. Year-over-year the index was up 4.7 per cent. Markets had been looking for a number closer to 4.4 per cent.
In Canada, bank earnings kicked off this morning with results from Canadian Imperial Bank of Commerce this morning. More earnings from the country’s other big lenders follow next week.
CIBC posted a decline in first-quarter profit, hit by higher provisions to settle a lawsuit tied to the 2008 financial crisis. CIBC posted an overall net profit of $432-million, or $0.39 per share, compared with $1.87-billion, or $2.01 per share, seen a year ago. Last week, CIBC said it would pay $770-million to a vehicle controlled by private-equity firm Cerberus Capital Management to resolve the lawsuit. Adjusted net income fell about 3 per cent to $1.841-billion or $1.94 a share from year earlier levels. That topped the $1.73 per share analysts had been expecting, according to Refinitiv. CIBC shares were up nearly 2 per cent shortly after the opening bell in Toronto.
The Globe’s Stefanie Marotta reported this week that analysts anticipate that loan growth will boost bank results, fuelled by aggressive interest-rate hikes by the Bank of Canada and demand from commercial customers. But analysts are also watching for slowing growth in mortgages – which make up a swath of the banks’ overall lending portfolios – and rising reserves for potential sour loans, all while tighter regulatory and government oversight take a notch out of earnings.
So far, more than half the companies on the TSX have reported results with 63.3 per cent topping fourth-quarter earnings expectations, according to Refinitiv data.
Overseas, the pan-European STOXX 600 down 0.15 per cent by midday. Britain’s FTSE 100 gained 0.15 per cent. Germany’s DAX slid 0.57 per cent and France’s CAC 40 was down 0.45 per cent.
In Asia, Japan’s Nikkei closed up 1.29 per cent. Hong Kong’s Hang Seng lost 1.68 per cent.
Commodities
Crude prices were up for a second consecutive session with lower exports from Russia offsetting demand concerns and higher weekly inventory levels in the U.S.
The day range on Brent was US$82.49 to US$83.39 in the early premarket period. The range on West Texas Intermediate was US$75.50 to US$76.50. Crude prices rose about 2 per cent on Thursday and are flat for the week after slumping 4 per cent the prior week.
“It looks like oil has been beaten up enough,” OANDA senior analyst Ed Moya said.
“It doesn’t seem like recession risks won’t feel real until closer to the summer, so the oil market should be relatively tight until then.”
Prices gained on news that Russia expects to cut oil exports from its western ports by as much as 25 per cent in March, more than its announced production cuts of 500,000 barrels a day.
That was offset somewhat be the latest report from the U.S. Energy Information Administration which showed crude inventories last week hit their highest since the spring of 2021. U.S. crude stocks rose by 7.6 million barrels to about 479 million barrels in the week to Feb. 17, the EIA said.
In other commodities, spot gold was down 0.1 per cent at US$1,821.80 per ounce early Friday morning. U.S. gold futures rose 0.2 per cent to US$1,831.00. Gold prices look set for a fourth week of declines.
Currencies
The Canadian dollar was weaker while its U.S. counterpart edged up against a group of world currencies and looked set for fourth weekly gain as markets anticipate continued increases in U.S. interest rates.
The day range on the loonie was 73.64 US cents to 73.93 US cents in the early premarket period. The Canadian dollar is down about 0.70 per cent over the last five days and is off 0.13 per cent so far this year.
There were no major Canadian economic releases due on Friday.
On world markets, the dollar index, which measures the U.S. currency against six peers, was 0.1 per cent higher at 104.71, hovering around the near seven-week high of 104.78 it touched on Thursday, according to figures from Reuters. The index is up more than 2 per cent so far in February.
The euro and Britain’s pound were about flat against the greenback at US$1.0586 and US$1.2021.
In bonds, the yield on the U.S. 10-year note was up slightly at 3.902 per cent ahead of the North American opening bell.
More company news
Boeing Co has temporarily halted deliveries of its 787 Dreamliner jets as the U.S. plane maker conducts additional analysis on a fuselage component, the U.S. Federal Aviation Administration (FAA) said. Deliveries will not resume until the FAA is satisfied that the issue has been addressed, the agency said. “The FAA is working with Boeing to determine any actions that might be required for recently delivered airplanes,” the agency said. -Reuters
Cineworld said on Friday its shareholders may see the value of their equity wiped out as it looks to exit from Chapter 11 bankruptcy protection after it failed to find a buyer for the whole of the world’s second biggest cinema chain. It said it had received initial proposals from a number of counterparties but none offered an all-cash bid for the entire company. “In light of the level of existing debt that is expected to be released under any (reorganisation) plan, the Company does not believe that there will be sufficient creditor support for a Plan that contemplates any recovery for equity interests,” it said in a statement. -Reuters
Economic news
(8:30 a.m. ET) U.S. personal spending and income for January.
(8:30 a.m. ET) U.S. core PCE price index for January.
(10 a.m. ET) U.S. new home sales for January.
(10 a.m. ET) U.S. University of Michigan consumer sentiment for February.
Also: Ottawa’s budget balance for December.
With Reuters and The Canadian Press