Equities
Canada’s main stock index opened higher Wednesday helped by gains in energy shares on the back of stronger crude prices. On Wall Street, key indexes were also up in early trading as markets await key inflation data later in the week.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 81.56 points, or 0.41 per cent, at 19,980.42.
In the U.S., the Dow Jones Industrial Average rose 49.93 points, or 0.15 per cent, at the open to 33,754.03.
The S&P 500 opened higher by 13.10 points, or 0.33 per cent, at 3,932.35, while the Nasdaq Composite gained 52.36 points, or 0.49 per cent, to 10,794.99 at the opening bell.
Markets had been waiting for comments from Fed chair Jerome Powell at a conference in Stockholm on Tuesday. But Mr. Powell stuck mainly to a discussion of the central bank’s role in fighting climate change and offered little indication of the Fed’s next move on rates.
“We didn’t get a steady dose of hawkish speak from Fed Chair Powell and as expectations grew for disinflation trends to continue,” OANDA senior analyst Ed Moya said.
“Wall Street appears to be turning more bullish with stocks, but that might include a rebalancing of how much weight they put into tech stocks.”
Market attention now turns to Thursday’s U.S. inflation figures, which are expected to show a pullback in price pressures, and Friday’s earnings releases from some of the biggest lenders in the United States.
Meanwhile, the World Bank has predicted global growth of about 1.7 per cent this year, down sharply from forecasts last summer. Swissquote senior analyst Ipek Ozkardeskaya said that would be the third worst growth in three decades after 2009 and 2020.
“Although the slowing economic growth softens the rate expectations – and boost equities, a weaker global economy should weigh on corporate profits and should not let the rally run too far,” she said.
Wednesday's analyst upgrades and downgrades
In this country, The Globe’s Rachelle Younglai reports that Shopify Inc. put its massive office space in downtown Toronto on the sublet market on Tuesday, flooding the country’s largest business hub with even more unused space. The e-commerce company’s lease is for 348,103 square feet, spanning seven floors of a newly built office, residential and retail complex, according to documents marketing the new space.
On the earnings front, Vancouver-based retailer Aritzia reports its latest quarter results after markets close.
Overseas, the pan-European STOXX 600 was up 0.55 per cent by midday. Britain’s FTSE 100 gained 0.72 per cent. Germany’s DAX and France’s CAC advanced 1.06 per cent and 1 per cent, respectively.
In Asia, Japan’s Nikkei finished up 1.03 per cent. Hong Kong’s Hang Seng rose 0.49 per cent.
Commodities
Crude prices advanced as a rise in weekly U.S. inventories was offset by continued optimism about China’s reopening after strict COVID-19 restrictions.
The day range on Brent was US$79.31 to US$80.80 in the early premarket period. The range on West Texas Intermediate was US$74.31 to US$75.69.
“The oil market is digesting a global slowdown that might not be as bad as feared,” OANDA’s Ed Moya said in a note.
“Energy traders still believe that OPEC+ will do whatever is needed to keep prices supported and that includes more production cuts this quarter. "
Prices saw some downward pressure from the latest weekly inventory numbers from the American Petroleum Institute, which showed socks rose by 14.9 million barrels for the week ended Jan. 6. Analysts had been expecting a decline. Distillate stocks were up about 1.1 million barrels for the week.
More official U.S. government figures are due later Wednesday morning.
In other commodities, gold prices saw a fourth session of gains early Wednesday morning.
Spot gold rose 0.4 per cent to US$1,884.98 per ounce, its highest level since early May. U.S. gold futures added 0.7 per cent to US$1,889.10.
“Gold prices are holding near recent highs as traders grow optimistic the Fed won’t be able to follow through with its hawkish threats,” Mr. Moya said.
Currencies
The Canadian dollar was steady in early trading while its U.S. counterpart saw modest gains against a group of world currencies ahead of tomorrow’s U.S. inflation report.
The day range on the loonie was 74.38 US cents to 74.57 US cents.
There were no major Canadian economic releases due Wednesday.
On world markets, the dollar index rose 0.15 per cent to 103.42 against a basket of currencies.
The euro hovered around its strongest level against the dollar in seven months, flattening at US$1.0733, according to figures from Reuters. The dollar is now down about 12 per cent against the euro since hitting a 20-year high in September.
The Australian dollar edged up 0.1 per cent to US$0.6900 after data showed the annual pace of inflation increased to 7.3 per cent in November, leaving room for more rate hikes, Reuters reported.
In bonds, the yield on the benchmark U.S. 10-year note was down at 3.574 per cent in the predawn period.
More company news
Barrick Gold Corp said on Wednesday it signed new joint venture deals with Saudi Arabian Mining Co (Ma’aden), the Gulf’s largest miner, for two copper exploration projects. The two prospective exploration projects would include the Jabal Sayid South and Umm Ad Damar license areas, the Canadian miner said. The new JVs would expand Barrick’s exploration footprint in Saudi Arabia and open up potential synergies with the neighbouring Jabal Sayid mine, an existing 50/50 JV between Barrick and Ma’aden.
Environment and Climate Change Canada says Teck Metals Ltd., a subsidiary of Teck Resources Ltd., has been ordered to pay $2.2-million in federal and provincial fines for an effluent spill into the Columbia River. The government department says in a release that Teck earlier pleaded guilty to two charges laid under the federal Fisheries Act and one charge under British Columbia’s Environmental Management Act.
Staff at Goldman Sachs are bracing for news on whether they will keep their jobs on Wednesday, as the U.S. investment bank begins a sweeping cost-cutting drive that could see its 49,000-strong global workforce shrink by thousands. The long-anticipated jobs cull at the Wall Street titan, expected to represent the biggest contraction in headcount since the financial crisis, is likely to affect most of the bank’s major divisions, with its under-fire investment banking arm facing the deepest cuts, a source told Reuters this month. -Reuters
With Reuters and The Canadian Press