Equities
Canada’s main stock index slid at Friday’s opening bell with consumer discretionary stocks weighing as traders sift through a better-than-expected reading on hiring in January. On Wall Street, key indexes saw a positive start with the S&P 500 again breaching the 5,000 mark.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 15.37 points, or 0.07 per cent, at 20,904.27.
In the U.S., the Dow Jones Industrial Average rose 5.64 points, or 0.01 per cent, at the open to 38,731.97. The S&P 500 opened higher by 6.26 points, or 0.13 per cent, at 5,004.17, while the Nasdaq Composite gained 48.66 points, or 0.31 per cent, to 15,842.38 at the opening bell.
In Canada, investors got January jobs figures from Statistics Canada before the start of trading.
The agency said the economy added 37,300 positions last month. That was more than double the 15,000 increase economists had been forecasting. Canada’s unemployment rate ticked lower to 5.7 per cent in January from 5.8 per cent the month before. Economists had been forecasting a reading of 5.09 per cent in January.
Average hourly wage growth for permanent employees declined to 5.3 per cent last month, from 5.7 per cent in December.
“The data today will reinforce that near-term interest rate cuts from the Bank of Canada are unlikely.” RBC assistant chief economist Nathan Janzen said. “Our own base case assumes the first interest rate cut from the BoC in June.”
On the corporate side, earnings from corporate Canada continue with results this morning from Telus, Enbridge, Magna International and Canopy Growth.
The Globe’s Alexandra Posadzki reports this morning that Telus reported profit of $310-million in fourth quarter, up 17 per cent from a year earlier when it had $265-million of profit. Its quarterly revenue came to $5.2-billion, up 2.8 per cent year-over-year from $5.06-billion. The profit amounted to 20 cents per share, up from 17 cents per share.
Meanwhile, The Globe’s Susan Krashinsky Robertson reports Indigo Books & Music Inc. posted a 70-per-cent decline in third-quarter profit, and is borrowing more money from its controlling shareholder, as the retailer continues to struggle and faced slumping sales during the crucial holiday shopping season. The Toronto-based retailer reported net earnings of nearly $10-million or 36 cents per share in the 13 weeks ended Dec. 30, 2023, compared to $34.3-million or $1.23 per share in the same period the prior year. The results were released after Thursday’s closing bell.
Overseas, the pan-European STOXX 600 was up 0.15 per cent by midday. Britain’s FTSE 100 gained 0.11 per cent. Germany’s DAX added 0.07 per cent while France’s CAC 40 was flat.
In Asia, Japan’s Nikkei finished up 0.09 per cent. Hong Kong’s Hang Seng finished down 0.83 per cent in a shortened session while many other Asian markets were closed for the Lunar New Year holidays.
Commodities
Crude prices were treading water in early trading but looked set for a positive week amid continuing geopolitical tensions in the Middle East.
The day range on Brent was US$81.36 to US$81.85 in the early premarket period. The range on West Texas Intermediate was US$75.98 to US$76.63. Both benchmarks were up more than 5 per cent for the week by early Friday morning.
Brent and WTI added about 3 per cent on Thursday after a cease-fire effort in the Israel-Hamas war failed to yield an agreement.
“Crude oil leapt higher as Israel took hope for a ceasefire agreement off the table, triggering a wave of buying as geopolitical risk went on the boil again,” Stephen Innes, managing partner with SPI Asset Management, said.
“Prime Minister Benjamin Netanyahu said that he sees no other solution than total victory following a counteroffer from Hamas for a ceasefire.”
In other commodities, spot gold was steady at US$2,032.70 per ounce by early Friday morning. Bullion has declined 0.3 per cent so far in the week. U.S. gold futures were flat at US$2,048.40 per ounce.
Currencies
The Canadian dollar was steady while its U.S. counterpart edged up and looked set for another weekly gain against a basket of currencies.
The day range on the loonie was 74.19 US cents to 74.36 US cents in the early premarket period. The Canadian dollar was little changed against the greenback over the past five days.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.05 per cent to 104.22 in early trading. The index was up 0.2 per cent for the week, helped by fading optimism that the Federal Reserve will opt for an early rate cut.
The euro slid 0.11 per cent to US$1.0767. Britain’s pound was off 0.06 per cent at US$1.2610.
In bonds, the yield on the U.S. 10-year note was down slightly at 4.166 per cent in the predawn period.
More company news
Pipeline operator Enbridge on Friday missed fourth-quarter profit estimates, hurt by lower earnings from its gas transmission and midstream segment. The company posted an adjusted profit of 64 cents per share for the quarter ended Dec. 31, compared with the average analyst estimate of 68 cents per share, according to LSEG data. -Reuters
Magna International Inc. raised its dividend as it reported its fourth-quarter profit and sales rose compared with a year ago. The auto parts maker, which keeps its books in U.S. dollars, says it will pay a quarterly dividend of 47.5 cents US per share, up from 46 cents US per share. The increased payment to shareholders came as the company reported net income attributable to Magna of US$271 million or 94 cents US per diluted share for the quarter ended Dec. 31, up from US$95 million or 33 cents US per diluted share a year earlier. Sales for the quarter totalled US$10.45 billion, up from US$9.57 billion in the last three months of 2022. On an adjusted basis, Magna says it earned US$1.33 per diluted share in its fourth quarter, up from an adjusted profit of 94 cents US per diluted share a year earlier. -The Canadian Press
PepsiCo fell short of Wall Street estimates for fourth-quarter revenue and forecast weak organic growth for 2024 as the soda and snacks giant’s multiple price hikes crimp demand for its juices and Lay’s crisps. The company’s shares fell 1.6% in premarket trading. Net revenue fell to US$27.85-billion in the quarter from US$28-billion a year earlier, while analysts on average had estimated US$28.40-billion, according to LSEG data. -Reuters
Economic news
(8:30 a.m. ET) Canadian employment for January.
(10:30 a.m. ET) Bank of Canada Senior Loan Officer Survey for Q4.
With Reuters and The Canadian Press