Equities
Canada’s main stock index edged higher at Wednesday’s opening bell, supported by tech and consumer discretionary stocks. Wall Street saw a muted start with traders looking ahead to tomorrow’s key U.S. inflation report.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 22.91 points, or 0.11 per cent, at 20,993.89.
In the U.S., the Dow Jones Industrial Average rose 27.75 points, or 0.07 per cent, at the open to 37,552.91.
The S&P 500 opened higher by 3.44 points, or 0.07 per cent, at 4,759.94, while the Nasdaq Composite gained 19.99 points, or 0.13 per cent, to 14,877.70 at the opening bell.
Markets continue to wait for Thursday’s U.S. inflation figures for December, hoping for clues about how quickly the Federal Reserve could start cutting rates. Markets are now expecting a more than 60-per-cent chance of the first cut in March, although bets have been scaled back recently after investor enthusiasm at the prospect of lower borrowing costs drove a late-year rally in 2023.
“Early optimism seen throughout financial markets may be difficult to maintain given the uncertainty within markets as we head into a crucial second half of the week,” Joshua Mahony, chief market analyst with Scope Markets, said.
“Between tomorrow’s U.S. inflation report, and the earnings from a raft of big [U.S.] banks, we should gain greater clarity over market sentiment by the weekend.”
Economists are expecting the annual rate of U.S. inflation to edge up to 3.2 per cent in December from 3.1 per cent a month earlier, but core inflation is seen easing to 3.8 per cent from 4 per cent. The December figures will be released before markets open on Thursday.
In Canada, investors will get earnings from Vancouver-based retailer Aritzia after the close of trading.
Elsewhere, The Globe’s Stefanie Marotta and Rita Trichur report that Toronto-Dominion Bank executives knew about an anti-money-laundering probe by the U.S. Department of Justice more than six months before the company publicly disclosed the investigation that derailed its acquisition of Tennessee-based First Horizon Bank, according to a report from The Capitol Forum. The Capitol Forum’s story citing anonymous sources was published late Monday as details also emerged about a legal case filed last year against a former TD employee in New Jersey charged with helping launder millions of dollars in illegal drug sales since early 2022.
On Wall Street, shares of Juniper Networks were up more than 1 per cent in early trading after Hewlett Packard Enterprise said it would buy the networking gear maker for US$14-billion in an all-cash deal, in an attempt to bolster the company’s artificial intelligence offerings. The deal was announced after Tuesday’s closing bell.
Overseas, the pan-European STOXX 600 was down 0.23 per cent by midday. Britain’s FTSE 100 slid 0.28 per cent. Germany’s DAX and France’s CAC 40 lost 0.09 per cent and 0.19 per cent, respectively.
In Asia, Japan’s Nikkei finished up 2.01 per cent to break above 34,000 for the first time since 1990. Hong Kong’s Hang Seng lost 0.57 per cent.
Commodities
Crude prices firmed in early trading after weekly industry inventory figures showed a decline in crude stocks but a gain in refined products.
The day range on Brent was US$77.09 to US$78.05 in the early premarket period. The range on West Texas Intermediate was US$71.74 to US$72.74.
Data from the American Petroleum Institute showed crude inventories fell by more than 5 million barrels last week. Analysts polled by Reuters had been looking for an increase of about 700,000 barrels.
However, the report also indicated that gasoline inventories rose by 4.9 million barrels. Distillate stocks increased by 6.9 million barrels. More official U.S. government numbers are due later this morning from the U.S. Energy Information Administration.
“The oil market remains highly sensitive to supply and demand dynamics and the unknowns around geopolitical headline risk,” Stephen Innes, managing partner with SPI Asset Management, said in an early note.
Crude prices have been choppy through the week so far, falling about 3 per cent on Monday before rising 2 per cent on Tuesday. Key factors continue to be concerns about trade disruptions on the Red Sea in the wake of attacks by Yemen’s Houthi militia on vessels in the region as well as a shutdown of a key Libyan oilfield. On Sunday Libya’s National Oil Corporation declared force majeure at its Sharara oilfield, which can produce up to 300,000 barrels per day, Reuters reported.
In other commodities, spot gold edged up 0.3 per cent to US$2,035.23 per ounce by early Wednesday morning. U.S. gold futures rose 0.4 per cent to US$2,041.40 per ounce.
Currencies
The Canadian dollar was firmer while its U.S. counterpart dipped against a group of world currencies ahead of tomorrow’s U.S. inflation data.
The day range on the loonie was 74.61 US cents to 74.82 US cents in the predawn period. The Canadian dollar was down 0.93 per cent for the year-to-date against the greenback as of early Wednesday morning.
“The Canadian dollar is a marginal out-performer against the U.S. dollr on the day but spot continues to hold in a trading range,” Shaun Osborne, chief FX strategist with Scotiabank, said, noting sluggish stock gains suggest the scope for Canadian dollar appreciation is limited for now, given the lack of fundamental drivers.
Elsewhere, the U.S. dollar index, which weighs the greenback against a basket of currencies, was down 0.13 per cent at 102.43. The index is up about 1 per cent so far this month after falling 2 per cent in December.
The euro advanced 0.17 per cent to US$1.0952 while Britain’s pound rose 0.15 per cent to US$1.2730.
In bonds, the yield on the U.S. 10-year note was lower at 3.985 per cent in the early premarket period.
More company news
West Fraser Timber Co. says it’s closing one U.S. sawmill and indefinitely curtailing another because of high fibre costs and soft lumber markets. The Vancouver-based company says it’s closing its Maxville, Florida, sawmill and indefinitely curtailing operations at its Huttig, Arkansas, sawmill by the end of the month. West Fraser says the closure of the Maxville sawmill will affect around 80 employees, while the curtailment of the Huttig sawmill will affect 140 employees. -The Canadian Press
Economic news
(10 a.m. ET) U.S. wholesale trade for November.
With Reuters and The Canadian Press