Equities
Canada’s main stock index edged higher at Monday’s opening bell, helped by gains in utilities stocks. On Wall Street, key indexes saw a tepid start with traders awaiting tomorrow’s U.S. inflation report.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 6.97 points, or 0.03 per cent, at 21,016.57.
In the U.S., the Dow Jones Industrial Average fell 14.93 points, or 0.04 per cent, at the open to 38,656.76.
The S&P 500 opened higher by 0.22 points at 5,026.83, while the Nasdaq Composite dropped 10.05 points, or 0.06 per cent, to 15,980.62 at the opening bell.
Key this week will be Tuesday morning’s U.S. inflation data for January.
“The United States isn’t entirely home-free regarding inflation concerns, despite the market’s inclination to suggest otherwise,” Stephen Innes, managing partner with SPI Asset Management, said.
“The critical question in the macro-policy realm remains unanswered: Is U.S. inflation moving towards a sustainable trajectory aligned with the Fed’s definition of price stability?” he said.
He said the annual rate of core inflation, which excludes food and energy costs to give a clearer picture of underlying price pressures, is expected to come in at 3.7 per cent. That would be the smallest year-over-year advance since April 2021. Overall inflation, he said, is expected to rise by less than 3 per cent year-over-year for the first time in nearly two years.
“The bottom line is that the Fed still requires more time and data on prices, wages, and demand to ascertain whether inflation will sustainably return to the target before declaring the mission accomplished,” he said.
“However, as of now, they can take comfort in the fact that supply chains remain supportive and cooperative.”
In Canada, earnings continue to roll in through the week. Restaurant Brands International, which operates the Tim Hortons chain, and Shopify report on Tuesday morning. TC Energy and Air Canada release quarterly results on Friday.
Overseas, the pan-European STOXX 600 was up 0.27 per cent by midday. Britain’s FTSE 100 slid 0.10 per cent. Germany’s DAX and France’s CAC 40 rose 0.32 per cent and 0.38 per cent, respectively.
Commodities
Crude prices were weaker in early trading with geopolitical risks continuing to drive sentiment.
The day range on Brent was US$81.26 to US$81.99 in the early premarket period. The range on West Texas Intermediate was US$76.02 to US$76.66. Both benchmarks gained about 6 per cent last week.
“This week, OPEC and IEA will release their monthly report on Tuesday and Thursday, respectively,” Swissquote senior analyst Ipek Ozkardeskaya said in a note.
“Attention will be paid to how they will revise their demand outlook in reaction to the global developments.”
Reuters reported that the Israeli military said on Monday it had conducted a “series of strikes” on southern Gaza that have now “concluded,” days after Israeli Prime Minister Benjamin Netanyahu rejected a ceasefire proposal from Hamas.
In other commodities, spot gold held its ground at US$2,023.03 per ounce by earl Monday morning. U.S. gold futures were also steady at US$2,037.10 per ounce.
Currencies
The Canadian dollar was modestly lower while its U.S. counterpart saw slight gains as traders await tomorrow’s U.S. inflation data.
The day range on the loonie was 74.14 US cents to 74.35 US cents in the early premarket period.
The U.S. dollar index was up 0.06 per cent at 104.17.
The euro slid 0.10 per cent to US$1.0773. Britain’s pound was down 0.03 per cent at US$1.2625.
The yield on the U.S. 10-year note was lower at 4.175 per cent ahead of the North American opening bell.
More company news
Diamondback Energy on Monday decided to buy the largest privately held oil and gas producer in the Permian basin, Endeavor Energy Partners, in a cash-and-stock deal for about US$26-billion, including debt. The deal comes after a new wave of consolidation in the prolific Permian basin to boost production, the biggest in 2023 being Exxon Mobil’s US$60-billion deal for Pioneer Natural Resources. The combined company would be the third largest oil and gas producer in the region behind Exxon and Chevron, with the latter also having announced recent deals. -Reuters
Economic news
(2 p.m. ET) U.S. budget balance for January.
With Reuters and The Canadian Press
Terry Weber