Equities
Canada’s main stock index was treading water at Thursday’s opening bell with strength in the energy sector helping limit losses. On Wall Street, the Nasdaq and S&P 500 both started in the red after a stronger-than-expected reading on private hiring in the U.S. economy raised questions about the timing of potential rate cuts.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 1.7 points, or 0.01 per cent, at 20,816.88.
In the U.S., the S&P 500 opened lower by 5.27 points, or 0.11 per cent, at 4,698.72, while the Nasdaq Composite dropped 47.98 points, or 0.31 per cent, to 14,545.23 at the opening bell.
The Dow Jones Industrial Average rose 51.2 points, or 0.18 per cent, at the open to 37,498.28.
Markets have been looking for clear signals about the course of potential rate cuts this year after a wave of optimism buoyed stocks in the home stretch of 2023. On Wednesday, the Fed’s minutes from its December meeting failed to give a clear picture of what’s in store.
“Yesterday’s FOMC minutes brought a little bit of something for everyone, with members expressing caution as they attempt to drive inflation back down to target,” Joshua Mahony, chief market analyst with Scope markets, said in an early note.
“While they currently do not see any upside risk to inflation, there is a concern that they could stall the current disinflation should they pivot too swiftly.”
“All eyes will now turn towards the U.S. employment data, with today’s ADP payrolls figure leading into tomorrow’s jobs report,” he said. “With Fed member [Thomas] Barkin speculating that a soft-landing looks increasingly likely, a gradual deterioration in the payrolls and unemployment rate could help put pressure on the FOMC to cut rates in March.”
December jobs numbers for both Canada and the United States will be released before markets open on Friday morning. Early Thursday, payroll processor ADP said private hiring in the U.S. last month totalled 164,000 positions, up from 101,000 in November and above analysts’ expectations of about 130,000. Weekly U.S. jobless claims came in at 202,000 last week, down 18,000 from the prior week and below the 216,000 analysts had been forecasting.
On the corporate side, a Bloomberg report said Wednesday that Toronto-based Barrick Gold contacted some of First Quantum’s biggest shareholders late last year to ascertain their interest in a takeover. The Globe’s Niall McGee reports shares in Vancouver-based First Quantum recently lost about half their value after the Panamanian government in November ordered the company to close its Cobre Panama mine, after the country’s Supreme Court ruled that its mining contract was unconstitutional. First Quantum shares were lower shortly after the opening bell in Toronto.
Overseas, the pan-European STOXX 600 was up 0.39 per cent early Thursday. Britain’s FTSE 100 added 0.16 per cent. Germany’s DAX and France’s CAC 40 rose 0.27 per cent and 0.25 per cent, respectively.
In Asia, Japan’s Nikkei was down 0.53 per cent. Hong Kong’s Hang Seng was flat.
Commodities
Crude prices were higher in early trading, adding to the the previous session’s gains, as supply concerns and geopolitical tensions continue to underpin sentiment.
The day range on Brent was US$78.30 to US$79.41 early Thursday morning. The range on West Texas Intermediate was US$72.90 to US$74. Both benchmarks were up by more than 1 per cent early Thursday morning after rising about 3 per cent on Wednesday.
Reuters reported that local protests on Wednesday forced a production shutdown at Libya’s Sharara oilfield, which can produce up to 300,000 barrels per day. The field, one of Libya’s largest, has been a frequent target for local and broader political protests. At the same time, concerns about trade on the Red Sea continue.
“Both could threaten output if intensified but may not pose a substantial upside risk to prices otherwise,” OANDA senior analyst Craig Erlam said in a recent report.
“Brent and WTI are trading around these low levels because the market is well supplied and cracks have appeared in the OPEC+ alliance, creating uncertainty around its output cuts.”
Later this morning, markets will get a reading on weekly U.S. inventories from the U.S. Energy Information Administration. On Wednesday, the American Petroleum Institute reported that crude stocks fell by 7.4 million barrels last week, far more than analysts had been expecting.
In other commodities, spot gold was up 0.3 per cent at US$2,047.79 per ounce in early trading, after hitting its lowest since Dec. 21 on Wednesday. U.S. gold futures rose 0.6 per cent to US$2,055.00 per ounce.
Currencies
The Canadian dollar was higher while its U.S. counterpart pulled back after touching a three-week high during the previous session.
The day range on the loonie was 74.84 US cents to 75.09 US cents in the early premarket period. The loonie has slid about 0.67 per cent against the greenback over the past five days.
The U.S. dollar index, which weighs the greenback against a basket of world currencies was down 0.32 per cent at 101.16 early Thursday morning. The index hit a three-week high of 102.73 on Wednesday.
The euro, meanwhile, was was up 0.38 per cent at US$1.0964 while Britain’s pound gained 0.43 per cent to US$1.2721.
In bonds, the yield on the U.S. 10-year note was up at 3.948 per cent in the predawn period.
More company news
Alimentation Couche-Tard Inc. says it has completed its acquisition of certain European retail assets from French oil giant TotalEnergies SE. The deal announced in March 2023 includes all of the company’s retail assets in Germany and the Netherlands, plus a 60 per cent controlling interest in its Belgium and Luxembourg entities. The acquisition by the Laval-based convenience store and gas station operator was valued at 3.1 billion euros. -The Canadian Press
Conagra Brands on Thursday cut organic net sales growth and profit forecast for fiscal 2024 and warned of a slower recovery in demand for its packaged meals and snacks. The Slim Jim beef jerky maker now expects annual organic net sales to decrease between 1.0% and 2.0%, compared with its earlier forecast of about 1% growth. The company expects annual adjusted earnings per share to be between US$2.60 and US$2.65, compared with its earlier forecast range of US$2.70 to US$2.75. -Reuters
Economic news
U.S. ADP employment figures for December (8:15 a.m. ET)
U.S. weekly jobless claims (8:30 a.m. ET)
With Reuters and The Canadian Press
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