Equities
Canada’s main stock index edged higher at the start of trading Tuesday after new figures showed Canada’s annual rate of inflation eased more than forecast in June. Wall Street’s key indexes saw a mixed open as traders weigh results from some of the biggest U.S. banks.
Shortly after the opening bell, the Toronto Stock Exchange’s S&P/TSX composite index was up 28.77 points, or 0.14 per cent, at 20,255.56.
In the U.S., the Dow Jones Industrial Average rose 11.73 points, or 0.03 per cent, at the open to 34,597.08.
The S&P 500 opened lower by 1.01 points, or 0.02 per cent, at 4,521.78, while the Nasdaq Composite dropped 32.70 points, or 0.23 per cent, to 14,212.25 at the opening bell.
Key for Canadian investors will be Statistics Canada’s report on June inflation. The numbers come a week after the Bank of Canada again hiked interest rates amid continued concerns that easing price pressures could stall in the months ahead.
Statscan says the annual rate of inflation eased to 2.8 per cent in June, more than markets had been expecting, from 3.4 per cent in May. The June reading was the lowest in 27 months. Gasoline prices led the decline, falling 21.6 per cent in June compared with the same month a year earlier. Grocery prices, meanwhile, rose 9.1 per cent on an annual basis.
On a monthly basis, consumer prices rose 0.1 per cent in June. Economists had been forecasting an increase closer to 0.3 per cent.
In the U.S., retail sales rose 0.2 per cent last month, below the 0.5-per-cent increase most economists had been expecting. May’s increase was revised up to a gain of 0.5 per cent from the 0.3-per-cent originally reported.
On the corporate side, earnings season sets in for Wall Street, with lenders including Morgan Stanley and Bank of America reporting results. On Friday, several other big U.S. banks released solid results for the latest quarter.
“While BoFA and Morgan Stanley’s investment branches may have taken a hit, investors will be looking at how well these banks benefited from rising rates,” Swissquote senior analyst Ipek Ozkardeskaya said.
Bank of America’s net income applicable to common shareholders rose to US$7.10-billion, or 88 US cents per diluted share, for the three months ended June 30, compared with US$5.93-billion, or 73 US cents per diluted share, a year earlier.
Morgan Stanley, meanwhile, said profit applicable to common shareholders fell to US$2.05-billion, or US$1.24 per diluted share, for the three months ended June 30, down from US$2.39 billion, or US$1.39 per diluted share, a year earlier.
Overseas, the pan-European STOXX 600 was up 0.12 per cent in morning trading.
Britain’s FTSE 100 fell 0.03 per cent. Germany’s DAX slid 0.07 per cent while France’s CAC 40 was off 0.04 per cent.
In Asia, Japan’s Nikkei advanced 0.32 per cent. Hong Kong’s Hang Seng dropped 2.05 per cent amid weakness in tech and real estate stocks.
Commodities
Crude prices saw modest early gains following the previous session’s declines as traders await readings on U.S. inventories.
The day range on Brent was US$78.19 to US$78.83 in the early premarket period. The range on West Texas Intermediate was US$73.88 to US$74.51. Both benchmarks lost more than 1 per cent on Monday after a weaker-than-expected reading on economic growth in China sparked concerns about demand.
“The numbers from the world’s second-largest economy are almost certainly the bigger factor here especially against the backdrop of sluggish growth around the globe,” OANDA senior analyst Craig Erlam said.
Later Tuesday, traders will get the first of two weekly readings on U.S. crude inventories with the release of fresh numbers from the American Petroleum Insitute.
More official government figures for last week follow on Wednesday morning.
Analysts are expecting to see a decline in crude stockpiles for the week.
In other commodities, gold prices edged higher, supported by recent weakness in the U.S. dollar.
Spot gold gained 0.2 per cent to US$1,959.35 per ounce by early Tuesday morning. U.S. gold futures were up 0.3 per cent to US$1,963.10.
Currencies
The Canadian dollar was down slightly in early trading while its U.S. counterpart held near its lowest level in more than a year as markets weigh the future path for U.S. interest rates.
The day range on the loonie was 75.67 US cents to 75.85 US cents in the early premarket period. The Canadian dollar is up about 0.21 per cent against the greenback over the past month.
On world markets, the U.S. dollar index, which measures the greenback against a basket of six currencies, fell as low as 99.587, not far off the 99.574 seen on Friday, which marked the lowest point for the index since April 2022, according to figures from Reuters.
The euro, meanwhile, hit a fresh 17-month high of US$1.1276 against the U.S. dollar in early European trade, with traders expecting another quarter point rate hike by the European Central Bank later this month.
Britain’s pound advanced 0.1 per cent to US$1.3083, not far from last week’s peak of US$1.3144, its highest since April 2022, Reuters reported.
In bonds, the yield on the U.S. 10-year note was lower at 3.762 per cent in the predawn period.
More company news
Metro grocery store workers in the Greater Toronto Area are gearing up to strike as early as tonight, as bargaining continues between the retailer and some 3,700 employees. Employees at 27 Metro stores in the GTA could strike as early as 11:59 p.m. on Tuesday. Unifor, the national union representing the Metro workers, called a strike vote before bargaining began, garnering 100 per cent support for the job action if a deal cannot be reached. -The Canadian Press
Economic news
(815 am ET) Canada housing starts for June.
(830 am ET) Canada consumer price index for June.
(830 am ET) Canada industrial product price index for June.
(830 am ET) U.S. retail sales for June.
(915 am ET) U.S. industrial production for June.
(10 am ET) U.S. NAHB housing market index
(10 am ET) U.S. business inventories
With Reuters and The Canadian Press