Equities
Wall Street futures were negative early Tuesday following a mixed showing in the previous session. Major European markets were also in the red. TSX futures were slightly lower.
In the early premarket period, Dow, S&P and Nasdaq futures all sat below break even. On Monday, only the Nasdaq managed a positive finish, rising 0.63 per cent. The Dow and S&P 500 ended yesterday’s session down 0.34 per cent and 0.08 per cent, respectively, after early gains faded. The S&P/TSX Composite Index finished Monday up 0.21 per cent.
Key stock indexes in Canada and the U.S. struggled early Tuesday after comments from Federal Reserve chair Jerome Powell offered little clarity on the future direction of interest rates.
At 9:38 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 6.76 points, or 0.03 per cent, at 19,863.83.
In the U.S., the S&P 500 opened lower by 3.52 points, or 0.09 per cent, at 3,888.57, while the Nasdaq Composite dropped 27.93 points, or 0.26 per cent, to 10,607.72 at the opening bell.
The Dow Jones Industrial Average was flat at the open.
On Tuesday, central banks were focus with both Mr. Powell and Bank of Canada Governor Tiff Macklem speaking at a conference in Stockholm.
In prepared remarks, Mr. Powell didn’t directly address the economic or monetary policy outlook but said the Federal Reserve’s independence from political influence is central to its ability to battle inflation, but requires it stay out of issues like climate change that are beyond its congressionally-established mandate, according to Reuters.
Tuesday's analyst upgrades and downgrades
Traders are now looking ahead to U.S. inflation figures for December are due Thursday morning for clues about the Fed’s path forward on rates. Economists are expecting headline inflation to slow to 6.5 per cent for the month, from 7.1 per cent in November. New Canadian inflation figures are due next week.
On the corporate side, Hydro One announced early Tuesday that David Lebeter will take over as chief executive officer of the company. He replaces William Sheffield who has been serving as CEO on an interim basis. Mr. Lebeter has previously served as Hydro One’s chief operating officer.
Overseas, the pan-European STOXX was down 0.62 per cent in morning trading. Britain’s FTSE 100 slid 0.26 per cent. Germany’s DAX and France’s CAC 40 were down 0.49 per cent and 0.51 per cent, respectively.
In Asia, Japan’s Nikkei closed up 0.78 per cent. Honk Kong’s Hang Seng lost 0.27 per cent.
Commodities
Crude prices wavered early Tuesday morning with caution over the U.S. interest rate outlook offsetting some of the optimism over China’s reopening after strict COVID-19 lockdowns.
The day range on Brent was US$78.81 to US$79.93 in the predawn period. The range on West Texas Intermediate was US$73.84 to US$75.06. Both benchmarks gained about 1 per cent on Monday.
Crude has been buoyed in recent days by optimism that the Fed could soon pullback on its campaign of aggressive rate hikes in the wake of solid economic data. However, two Fed officials this week injected a degree of uncertainty by saying that the central bank’s policy rate may need to rise to 5 per cent to 5.25 per cent to curb inflation.
“Crude oil remains under pressure despite the Chinese reopening talk, and the falling Russian supply,” Swissquote senior analyst Ipek Ozkardeskaya said.
Later in the session, traders will also get the first of two weekly U.S. inventory reports with new figures from the American Petroleum Association. More official numbers will follow Wednesday from the U.S. Energy Information Administration.
Currencies
The Canadian dollar turned lower in early trading while its U.S. counterpart steadied just above seven-month lows against a group of world currencies.
The day range on the loonie was 74.56 US cents to 74.77 US cents.
“Flat stocks, moderately weaker bonds and firmer crude oil are not providing any directional inputs for the CAD as markets await Powell’s comments,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“Governor Macklem was speaking earlier today at the same forum as the Fed chairman but confined comments to the subject at hand (the impact of climate and the greening of the economy).”
There were no major Canadian economic reports due Tuesday.
On world markets, the U.S. dollar index, which weighs the greenback against a basket of other currencies, was steady at 103.18, after tumbling 0.7 per cent and touching a seven-month low of 102.93 in the previous session, according to figures from Reuters.
The euro was at US$1.0731, little changed on the day, trading just below its seven-month high of US$1.07605 hit Monday. Britain’s pound was down 0.1 per cent at US$1.2160, just below Monday’s three-week high.
In bonds, the yield on the U.S. 10-year note was up at 3.55 per cent in the predawn period.
More company news
Cryptocurrency exchange Coinbase Global Inc said on Tuesday it will reduce its workforce by about 950 employees as part of a restructuring plan. A clutch of crypto firms, gripped by an industry-wide downturn that has deepened with the collapse of major exchange FTX, have filed for bankruptcy protection in recent months. -Reuters
Amazon has said it plans to shut three UK warehouses in a move that will impact 1,200 jobs, PA Media reported on Tuesday. An Amazon representative did not immediately respond to a request for comment from Reuters. The Seattle-based online retailer last week said it would cut more than 18,000 roles, impacting its e-commerce and human resources organizations - the latest in a series of layoffs to affect the tech industry. - Reuters
Bed Bath & Beyond Inc on Tuesday reported a quarterly loss of about US$393-million after a tough holiday season that it hoped would provide a financial cushion to its months-long cash burn. The company did not say if it would file for bankruptcy, after it said last week that it was seeking outside advisers to look at various options after years of weakening sales. -Reuters
Economic news
(5:10 a.m. ET) Bank of Canada Governor Tiff Macklem joins a panel in Stockholm on “Central bank independence and new risks: climate”
(9 a.m. ET) U.S. Fed Chair Jerome Powell joins a panel in Stockholm on “Central bank independence and the mandate - evolving views.”
With Reuters and The Canadian Press