Equities
Indexes on both sides of the border rebounded in early trading from the previous session’s rout, with gains in tech stocks helping buoy the S&P/TSX Composite Index.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 129.36 points, or 0.63 per cent, at 20,714.33.
In the U.S., the Dow Jones Industrial Average rose 99.92 points, or 0.26 per cent, at the open to 38,372.67.
The S&P 500 opened higher by 23.27 points, or 0.47 per cent, at 4,976.44, while the Nasdaq Composite gained 126.11 points, or 0.81 per cent, to 15,781.71 at the opening bell.
Wall Street’s main indexes each fell more than 1 per cent on Tuesday after new U.S. inflation figures disappointed markets. Canada’s main index closed yesterday down more than 2 per cent.
‘While [Federal Reserve chair] Jay Powell has spent months warning markets that their outlook over 2024 rate cuts was way off the mark, yesterday provided yet another reminder that we are unlikely to see inflation fall back down to the 2-per-cent target in the first half,” Joshua Mahony, chief market analyst with Scope Market, said.
“Market pricing for a March rate cut has essentially gone, and we are now gradually seeing confidence in a May rate cut fade somewhat.”
On Wednesday, Canadian investors got a snapshot of the housing market with the release of January home sales numbers from the Canadian Real Estate Association.
CREA said home sales rose 3.7 per cent on a monthly basis in January, adding to December’s 7.9-per-cent increase. The association said, while activity is now back on par with 2023′s relatively stronger months recorded over the spring and summer, it begins 2024 about 9 per cent below the 10-year average.
“Sales are up, market conditions have tightened quite a bit, and there has been anecdotal evidence of renewed competition among buyers; however, in areas where sales have shot up most over the last two months, prices are still trending lower,” Shaun Cathcart, CREA’s Senior Economist, said. “Taken together, these trends suggest a market that is starting to turn a corner but is still working through the weakness of the last two years.”
This afternoon, Bank of Canada Deputy Governor Rhys Mendes speaks at the Lazaridis School of Business & Economics at Wilfrid Laurier University.
On the corporate side, Canadian investors gets results from Barrick Gold and CAE Inc. before the start of trading. Insurers Manulife and Great-West Lifeco report after markets close.
Barrick Gold topped analysts’ forecasts in the latest quarter, helped by higher production and improved prices. Barrick reported adjusted profit of 27 US cents per share for the three months ended Dec. 31, compared with the analysts’ average estimate of 21 US cents, according to LSEG data. Barrick also announced a share buyback of up to $1-billion, Reuters reported.
On Wall Street, Kraft Heinz reports this morning while Cisco Systems releases results after the close of trading.
Overseas, the pan-European STOXX was up 0.53 per cent by afternoon. Britain’s FTSE 100 gained 0.85 per cent. A report released early Wednesday showed inflation in Britain held steady at 4 per cent in January, defying expectations of an increase in price pressures.
Germany’s DAX rose 0.37 per cent. France’s CAC 40 added 0.64 per cent.
In Asia, Japan’s Nikkei closed down 0.69 per cent after hitting its highest level in more than three decades earlier in the week. Hong Kong’s Hang Seng added 0.84 per cent.
Commodities
Crude prices were steady after new industry numbers showed U.S. crude stockpiles rose last week, but fuel inventories saw a bigger-than-expected decline.
The day range on Brent was US$82.33 to US$83.08 in the early premarket period. The range on West Texas Intermediate was US$77.52 to US$78.15.
Data from the American Petroleum Institute showed gasoline inventories fell 7.23 million barrels last week while distillate stocks declined by more than 4 million barrels. Both declines were bigger than markets had been forecasting.
However, crude inventories rose by 8.52 million barrels, more than expected.
More official U.S. government figures will be released later this morning.
Meanwhile, OPEC kept its demand forecast unchanged in its latest monthly outlook. The group said it still expects world oil demand will rise by 2.25 million barrels per day in 2024 and by 1.85 million barrels a day in 2025.
In other commodities, spot gold fell 0.2 per cent to US$1,989.10 per ounce by early Wednesday morning, its lowest since Dec. 13. Gold lost more than 1 per cent yesterday for its biggest daily decline since early December.
U.S. gold futures slid 0.2 per cent to US$2,002.30.
Currencies
The Canadian dollar edged higher as its U.S. counterpart pulled back slightly but remained near three-month highs.
The day range on the loonie was 73.67 US cents to 73.86 US cents in the early premarket period.
“The Canadian dollar has improved slightly along with its commodity currency peers so far today,” Shaun Osborne, chief currency strategist with Scotiabank, said. “Improved risk appetite and a moderate bid for crude has helped lift the CAD absent any other major developments.”
The U.S. dollar index slid 0.02 per cent to 104.94. On Tuesday, the index hit its best level in three months at 104.96 after January inflation figures disappointed markets, fuelling expectations that the Federal Reserve will wait longer to start start cutting interest rates.
The euro was down 0.09 per cent at US$1.0699. Britain’s pound fell 0.39 per cent to US$1.2541.
In bonds, the yield on the U.S. 10-year note was lower at 4.297 per cent. Treasury yields jumped on Tuesday in the wake of January’s hotter-than-forecast U.S. inflation data.
More company news
The Globe’s Stefanie Marotta reports this morning that Bank of Nova Scotia’s head of global banking and markets Jake Lawrence is leaving the lender after more than two decades to join Power Corp. of Canada. Mr. Lawrence, who in 2022 was considered a candidate for the top job at Scotiabank, is joining Power Corp. as chief financial officer. The departure is the latest in a leadership shakeup that has seen chief executive officer Scott Thomson bring in talent from other financial institutions while promoting more junior executives through the ranks internally.
Lyft shares surged more than 21% on Wednesday before the bell after the ride-hailing company said cost cuts would help it generate positive free cash flow for the first time in 2024 and posted market-beating quarterly profit. Its results were overshadowed by an error on a key margin metric in the earnings statement that led to a 67% surge in its shares before a clarification from Chief Financial Officer Erin Brewer in a conference call with analysts. -Reuters
Uber Technologies said on Wednesday it will buy back up to US$7-billion worth of company shares after a strong recovery in ride-share and healthy demand at its food delivery business. The company’s shares rose more than 5% to US$72.50 in trading before the bell. Over the next three years Uber expects gross bookings growth in the mid to high teens percentage. The ride-hailing firm posted its first annual net profit last year since the company went public in 2019. Uber had a free cash flow of US$3.4-billion in 2023, up from US$390-million a year earlier. -Reuters
Economic news
(9 a.m. ET) Canadian existing home sales and average prices for January.
(9 a.m. ET) Canada’s MLS Home Price Index for January.
(2:30 p.m. ET) BoC Deputy Governor Rhys Mendes speaks at the Lazaridis School of Business & Economics at Wilfrid Laurier University.
With Reuters and The Canadian Press
Terry Weber