Equities
Canada’s main stock index opened down on Monday amid weakness in materials shares as investors await earnings from the country’s biggest banks later in the days ahead. On Wall Street, key indexes were muted in early trading with key U.S. inflation data due later in the week.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 55.43 points, or 0.26 per cent, at 21,357.72.
In the U.S., the Dow Jones Industrial Average rose 13.26 points, or 0.03 per cent, at the open to 39,144.79.
The S&P 500 opened higher by 4.20 points, or 0.08 per cent, at 5,093.00, while the Nasdaq Composite gained 17.63 points, or 0.11 per cent, to 16,014.45 at the opening bell.
In Canada, traders will be watching bank earnings, which kick off on Tuesday with results from Bank of Nova Scotia and Bank of Montreal. Royal Bank of Canada and National Bank will release their results on Wednesday and Toronto-Dominion Bank and CIBC will follow on Friday.
The Globe’s Stefanie Marotta reports this morning that analysts are expecting Canada’s top banks to see bigger losses from commercial real estate loans in the first quarter. Expecting some pain in the first quarter, many analysts have cut their estimates – extending a trend seen throughout 2023. The analysts anticipate that earnings will drop as much as 12 per cent year-over-year.
On Monday, Canadian investors will get results from Cargojet.
On Wall Street, markets will be waiting for the Fed’s key inflation measure, with the release Thursday of the January personal consumption expenditure index.
“Economists expect the monthly core PCE reading to rise by 0.4 per cent in January, which would be the fastest reading for a year,” XTB research director Kathleen Brooks said.
“The annual rate is expected to fall a notch to 2.8 per cent from 2.9 per cent....While the annual rates are encouraging, the Fed is likely to be concerned by the reacceleration in the monthly rates, and these are the figures to watch.”
She said markets are expecting the Fed to start cutting rates in June, but that could be pushed back to the second half of the year if inflation is seen running hot.
Overseas, the pan-European STOXX 600 was down 0.27 per cent by midday. Euro zone inflation data is also due later in the week. Britain’s FTSE 100 lost 0.25 per cent. Germany’s DAX edged up 0.04 per cent. France’s CAC 40 slid 0.35 per cent.
In Asia, Japan’s Nikkei continued its record rally, ending up 0.35 per cent. Hong Kong’s Hang Seng fell 0.54 per cent.
Commodities
Crude prices were lower with uncertainty about supply and demand continuing to temper sentiment.
The day range on Brent was US$81 to US$81.77 in the early premarket period. The range on West Texas Intermediate was US$75.84 to US$76.68. Both benchmarks saw losses last week, with Brent down about 2 per cent while WTI lost about 3 per cent.
“The global oil market is experiencing higher uncertainty regarding the balance between supply and demand,” Stephen Innes, managing director with SPI Asset Management, said.
“This uncertainty has contributed to global benchmark trading within a relatively tight range.”
Despite ongoing geopolitical tensions and still robust U.S. macro, market, he said, participants are finding it challenging to gain clarity on the direction of the oil market in the near term.
In other commodities, gold prices were lower but still not far from the two-week highs seen during the previous session.
Spot gold was down 0.1 per cent at US$2,034.6 per ounce, as early Monday morning, after climbing to its highest level since Feb. 7 on Friday. U.S. gold futures edged 0.2-per-cent lower to US$2,044.5 per ounce.
Currencies
The Canadian dollar was steady while its U.S. counterpart saw modest declines against a basket of world currencies ahead of inflation data later in the week.
The day range on the loonie was 73.91 US cents to 74.35 US cents in the early premarket period. The Canadian dollar was down about 0.76 per cent against the greenback over the past month.
“The CAD is a moderate underperformer on the session so far, alongside its G10 commodity peers, reflecting soft risk appetite and somewhat softer commodity prices overall on the session,” Shaun Osborne, chief FX strategist with Scotiabank, said.
The U.S. dollar index, which weighs the greenback against a group of currencies, was down 0.11 per cent at 103.83.
The euro gained 0.19 per cent to US$1.0844. Britain’s pound rose 0.08 per cent to US$1.2683.
In bonds, the yield on the U.S. 10-year note was down at 4.24 per cent ahead of the North American opening bell.
More company news
Cargojet Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue fell. The air cargo company says it had a net loss of $34.9-million or $2.04 per diluted share for the quarter ended Dec. 31. The loss compared with a profit of $2.6-million or 15 cents per diluted share in the last three months of 2022. Revenue, excluding warrant amortization, for the quarter was $254.7-million compared with $271.0-million in the same quarter a year earlier. On an adjusted basis, Cargojet says it lost 14 cents per share in its latest quarter compared with an adjusted profit of 89 cents per share a year earlier. -The Canadian Press
Economic news
(8:30 a.m. ET) Canadian manufacturing sales for January.
(8:30 a.m. ET) Canadian wholesale trade for January.
(10 a.m. ET) U.S. new home sales for January. The Street is forecasting an annualized rate rise of 2.4 per cent.
(10:30 a.m. ET) U.S. Dallas Fed Manufacturing Activity survey for February.
With Reuters and The Canadian Press
Terry Weber