Equities
Canada’s main stock index slid at Monday’s opening bell with energy and materials stocks weighing on sentiment. Wall Street’s key indexes saw a mixed start with traders awaiting earnings later in the week while disappointing economic news out of China hit global markets.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 54.87 points, or 0.27 per cent, at 20,207.2.
In the U.S., the Dow Jones Industrial Average fell 9.29 points, or 0.03 per cent, at the open to 34,499.74.
The S&P 500 opened higher by 3.44 points, or 0.08 per cent, at 4,508.86, while the Nasdaq Composite gained 36.21 points, or 0.26 per cent, to 14,149.92 at the opening bell.
Figures released early Monday showed China’s economy grew at an annual rate of 6.3 per cent in the second quarter, falling short of the 7 per cent growth analysts had been forecasting. Quarterly growth, the usual measure for other major economies, was 0.8 per cent, according to government data released Monday, in line with expectations but down sharply from 2.2 per cent in January-June, The Associated Press reported.
“Market sentiment is pretty much negative among traders and investors due to the Chinese economic data, which missed the forecast and raised concerns that the second-biggest economy in the world is suffering from a crisis, Naeem Aslam, chief investment officer with Zaye Capital Markets, said in an early note.
“We think that traders should not be overly pessimistic about the Chinese economic numbers because the PBOC [People’s Bank of China] is fully committed to growth-related policies and is implanting the right policies to stimulate growth,” he said.
On Wall Street, markets are awaiting more bank earnings, after a solid showing form a handful of lenders on Friday. Bank of America and Morgan Stanley are both scheduled to report on Tuesday. On Wednesday, Tesla and Netflix both report results.
In Canada, inflation with be at the forefront, with Statistics Canada releasing the consumer price index for June on Tuesday morning. In May, the annual rate of inflation came in at 3.4 per cent, its slowest pace since 2021. That was down from 4.4 per cent in April. Last week, the Bank of Canada again raised interest rates and cautioned that the decline in inflationary pressures could stall.
“Overall, the economy is holding up better than expected even as higher interest rates bring inflation down, and we believe this month marks the end of what has been an aggressive rate hike path for both the Fed and the BoC,” BMO economist Shelly Kaushik said. “Still, the persistence in core inflation means we’re likely still in a ‘higher for longer’ rate environment.”
Overseas, the pan-European STOXX was down 0.69 per cent by afternoon. Britain’s FTSE 100 lost 0.21 per cent. Germany’s DAX and France’s CAC 40 slid 0.58 per cent and 1.22 per cent, respectively.
In Asia, Japan’s Nikkei was closed.
Commodities
Crude prices were weaker after a tepid reading on China’s GDP growth triggered concerns about demand in one of the world’s top consumers of oil.
The day range on Brent was US$78.45 to US$79.56 in the early premarket period. The range on West Texas Intermediate was US$74.02 to US$75.14.
“Monetary policy tightening has fed fears that the global economy is heading for a major downturn, which would weaken oil demand if that comes to fruition,” Stephen Innes, managing partner with SPI Asset management, said.
“Nonetheless, it also explains why typical holders of crude inventories carry less than normal.”
Both benchmarks were down more than 1 per cent in the predawn period, marking a second straight day of losses. Both, however, are also coming off weekly gains, finding support in production cuts from Saudi Arabia and Russia as well as supply disruptions.
In other commodities, spot gold was down 0.1 per cent at US$1,952.29 per ounce by early Monday morning. U.S. gold futures fell 0.4 per cent to US$1,956.10.
Currencies
The Canadian dollar was treading water while its U.S. counterpart was steady against a group of world currencies after falling more than 2 per cent last week.
The day range on the loonie was 75.56 US cents to 75.74 US cents in the predawn period. The Canadian dollar has gained 0.55 per cent against the greenback over the past five days and is up 2.6 per cent for the year to date.
On world markets, the U.S. dollar index, which measures the greenback against a basket of other currencies, was steady at 99.936 in the Asia session. The index fell 2.2 per cent last week, the biggest drop since November, according to figures from Reuters.
The euro, which gained 2.4 per cent last week to a 16-month high, held just below that level at US$1.1223. The yen, also up 2.4 per cent last week, held at 138.56 per U.S. dollar, the news agency said.
In bonds, the yield on the U.S. 10-year note was lower at 3.799 per cent ahead of the North American opening bell.
More company news
The Globe’s Susan Krashinsky Robertson reports Nike has permanently ended its sponsorship of Hockey Canada, finalizing an earlier pause of its marketing support and dealing a financial blow to the organization as it continues to experience the fallout from a sexual assault scandal last year. The company had been a premier marketing partner of Hockey Canada – its top tier of sponsors that also includes Esso, Telus and Tim Hortons, all of whom have paused support of the organization since last summer. The shift marks the end of a more than two-decade sponsorship that began in 1999, according to Hockey Canada’s website.
Canada’s Constellation Software on Monday said it would buy mortgage data vendor Black Knight’s Optimal Blue business for US$700-million. -Reuters
Economic news
G20 finance ministers and central bank governors meeting in India (July 15-18)
(830 am ET) Canada wholesale trade data for May.
(830 am ET) Canada international securities transactions for May
(830 am ET) U.S. Empire State Manufacturing Survey for July.
With Reuters and The Canadian Press