Equities
Canada’s main stock index opened higher Tuesday with improved metal prices helping lift mining-related stocks. On Wall Street, key indexes had a mixed start as traders sift through a raft of corporate earnings.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 44.51 points, or 0.21 per cent, at 20,968.81.
In the U.S., the Dow Jones Industrial Average fell 42.02 points, or 0.11 per cent, at the open to 37,959.79. The S&P 500 opened higher by 6.37 points, or 0.13 per cent, at 4,856.80, while the Nasdaq Composite gained 31.13 points, or 0.20 per cent, to 15,391.41 at the opening bell.
Earnings are in focus today with Johnson & Johnson and Procter & Gamble reporting before the bell on Wall Street. Netflix reports after the close of trading.
“Earnings announcements will take the center stage, with Netflix due to announce its Q4 results today after the bell,” Swissquote senior analyst Ipek Ozkardeskaya said.
“The streaming giant expects to have added millions more of new paid subscribers to its platform after it scrapped password sharing last year.”
In Canada, Canadian National Railway is due to release earnings after trading ends for the day.
Meanwhile, shares of United Airlines were up more than 8 per cent in early trading after the U.S. carrier offered a positive forecast for the year, despite cautioning of a bigger-than-expected loss in the first quarter linked to the grounding of Boeing MAX 9 aircraft. For the year, United said it expects adjusted profit of US$9-US$11 per share, compared with US$9.58 per share expected by Wall Street analysts. United’s results were released after Monday’s closing bell.
Overseas, the pan-European STOXX 600 was down 0.25 per cent by afternoon. Britain’s FTSE 100 slipped 0.05 per cent. Germany’s DAX and France’s CAC 40 were down 0.09 per cent and 0.39 per cent, respectively.
In Asia, Japan’s Nikkei ended down 0.08 per cent. Early Tuesday, the Bank of Japan kept its short and long-term rate targets unchanged, as expected. Hong Kong’s Hang Seng jumped 2.63 per cent, led by gains in tech shares.
Commodities
Crude prices were down in early trading as supply and demand continue to come up against each other amid continued geopolitical tensions and weather-related supply disruptions in the United States.
The day range on Brent was US$79.56 to US$80.43 in the early premarket period. The range on West Texas Intermediate was US$74.28 to US$75.15.
“In 2023, the demand for crude oil proved to be more robust than initially anticipated,” Stephen Innes, managing partner with SPI Asset Management, said in a note.
“However, despite the strong demand, prices remained low due to unexpectedly robust growth in supply. A parallel situation is unfolding as we transition into the beginning of 2024.”
He said the resilience of U.S. demand and strong demand in Asia and emerging markets has continued, while the supply side has again outpaced demand, keeping a lid on prices.
Reuters reported that North Dakota’s state pipeline authority said about 20 per cent of that state’s oil output remained shut due to extreme cold.
Later in the session, the American Petroleum Institute will release weekly U.S. inventory figures. More official government numbers follow on Wednesday morning.
Analysts polled by Reuters are expecting inventories to fall by about 3 million barrels last week. Gasoline inventories are seen rising while distillate stocks are expected to decline.
In other commodities, gold prices were up, helped by a softer U.S. dollar.
Spot gold rose 0.5 per cent to US$2,030.49 per ounce by early Tuesday morning. U.S. gold futures also rose 0.5 per cent to US$2,032.10.
Currencies
The Canadian dollar was little changed as traders await tomorrow’s Bank of Canada rate announcement, while the U.S. dollar slipped against a group of world currencies but remained not far from last week’s one-month high.
The day range on the loonie was 74.13 US cents to 74.33 US cents in the early premarket period. The Bank of Canada makes its next policy announcement on Wednesday morning. The bank isn’t expected to change rates but traders will be watching for hints about how soon the central bank could introduce cuts to borrowing costs.
“Spot has traded in a tight range overnight, with the Canadian dollar holding near yesterday’s session low as the global risk environment remains relatively soft,” Shaun Osborne, chief FX strategist with Scotiabank, said.
On world markets, the U.S. dollar index, which measures the currency against a group of global rivals, was down 0.05 per cent at 103.28 as traders pull back on expectations that the Federal Reserve will deliver its first rate cut in March. Last week, the index hit a one-month high of 103.69.
The euro was down 0.03 per cent at US$1.0882 while Britain’s pound rose 0.12 per cent to US$1.2726.
The U.S. dollar was down about 0.37 per cent against Japan’s yen at 147.51 by early Tuesday morning.
In bonds, the yield on the U.S. 10-year note was higher at 4.128 per cent ahead of the North American opening bell.
More company news
Johnson & Johnson on Tuesday reported fourth-quarter profit above Wall Street expectations, helped by demand for its blockbuster psoriasis treatment Stelara and strength in its medical device unit. It expects higher revenue from its multiple myeloma drug Darzalex and newer oncology drugs such as Carvykti and Tecvayli to help it meet its 2025 pharmaceutical sales target of US$57-billion. The company is expected to face fresh competition that year from the first biosimilar versions of its blockbuster psoriasis treatment Stelara. Anti-inflammatory drug Stelara brought in sales of US$2.75-billion for the quarter compared with analysts’ average estimate of US$2.63-billion, according to LSEG data. A key patent for Stelara expired in the United States last year but J&J struck deals with competitors to delay the launches of their biosimilars until 2025. -Reuters
Procter & Gamble missed market expectations for second-quarter sales on Tuesday, signaling weak demand for its beauty and personal-care products in its major market China. The company’s quarterly net sales rose to US$21.44-billion from US$20.77-billion a year earlier. Analysts had expected US$21.48-billion, according to LSEG data. -Reuters
Netflix said on Tuesday it will bring WWE’s flagship weekly program, Raw, to the streaming platform in January 2025. -Reuters
West Fraser Timber Co. Ltd. says it’s permanently closing its sawmill in Fraser Lake, B.C., after an orderly wind-down. The Vancouver-based company says it’s unable to access economically viable fibre in the region. West Fraser says the closure will affect about 175 employees, and it will mitigate the impact by providing work opportunities at its other operations. -The Canadian Press
Economic news
10 am ET: U.S. Richmond Fed Manufacturing Index for January.
With Reuters and The Canadian Press