Equities
Markets neared all-time highs as the European Central Bank cut its key interest rate by 25 basis points as the Bank of Canada did yesterday. While the move had been widely anticipated, the ECB also signalled that fight against inflation had yet to be won.
The S&P 500 and the Dow opened little changed after jobless claims data indicated growing weakness in the U.S. labour market, while gains in AI-favorite Nvidia boosted the Nasdaq.
The Dow Jones Industrial Average 0.05 per cent at the open to 38,825.40. The S&P 500 climbed 0.07 per cent at 5,357.80, while the Nasdaq Composite gained 0.10 per cent to 17,204.87 at the bell.
Canada’s main stock index was flat as gains in the energy sector were offset by losses in utilities shares. The S&P/TSX composite index opened at 22,145.30, up 0.28 points.
In Canada, investors are getting results from Transat AT.
The Air Transat parent company has reported a deeper loss for the second quarter, even as revenue rose amid stronger demand for travel. It cited engine recalls, tougher competition, union strike threats and an economic slowdown for the loss.
On Wall Street, markets are watching results from JM Smucker Co. and Enghouse Systems Ltd.
“Because [the ECB’s rate] decision is broadly expected and priced in since months, it won’t matter that much for the market mood. The real question is, what tidbit will [president Christine] Lagarde drop regarding the future rate cuts,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.
Overseas, the pan-European STOXX 600 was up 0.47 per cent in morning trading. Britain’s FTSE 100 advanced 0.32 per cent, Germany’s DAX gained 0.34 per cent and France’s CAC 40 added 0.19 per cent.
In Asia, Japan’s Nikkei closed 0.55 per cent higher at 38,703.51, while Hong Kong’s Hang Seng rose 0.28 per cent to 18,476.80.
Commodities
Oil prices extended gains with support from growing expectations of an interest rate cut from the U.S. Federal Reserve in September, even as the upside was capped by an OPEC+ plan to increase supply and higher U.S. inventories.
Brent crude futures traded up 0.7 per cent at US$78.97 a barrel, while the West Texas Intermediate (WTI) crude futures rose 0.0 per cent at US$74.70.
In other commodities, gold prices firmed, with spot gold rising 0.25 per cent to US$2,360 an ounce.
Currencies and bonds
The Canadian dollar weakened slightly against its U.S. counterpart.
The day range on the loonie was 72.97 US cents to 73.18 US cents in the early premarket period. The Canadian dollar was down about 0.18 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, retreated slightly to 104.21.
The euro rose 0.15 per cent to US$1.0885, while the British pound retreated to US$1.2781.
In bonds, the yield on the U.S. 10-year note edged higher to 4.304 per cent ahead of the North American opening bell.
Other corporate news
Quebec-based retailer Simons is set to take over two Toronto mall spaces once held by U.S. rival Nordstrom. The department store chain says it will move into the Yorkdale Shopping Centre and Toronto Eaton Centre by winter 2025 as part of a $75-million expansion.
Jif peanut butter maker JM Smucker has topped Wall Street estimates for fourth-quarter profit, helped by higher prices of condiments and frozen food as well as lower input costs, sending its shares up 2 per cent before the bell.
Economic news
(8:30 a.m. ET) Canada’s merchandise trade balance for April.
(8:30 a.m. ET) U.S. initial jobless claims for week of June 1 rose by 8,000 to 229,000, up from 221,000 the week before.
(8:30 a.m. ET) U.S. productivity and unit labor costs for Q1. Consensus estimates are annualized rate rises of 0.3 per cent and 4.8 per cent, respectively.
(8:30 a.m. ET) U.S. goods and services trade deficit (and revisions) for April.
With Reuters and The Canadian Press