Equities
Canada’s main stock index opened up Wednesday with gains in energy and tech stocks boosting sentiment. On Wall Street, key indexes were also higher at the opening bell with traders weighing the latest set of U.S. bank results and looking ahead to earnings from Netflix and Tesla later in the day.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 64.12 points, or 0.31 per cent, at 20,440.69.
In the U.S., the Dow Jones Industrial Average rose 39.28 points, or 0.11 per cent, at the open to 34,991.21.
The S&P 500 opened higher by 8.89 points, or 0.20 per cent, at 4,563.87, while the Nasdaq Composite gained 44.89 points, or 0.31 per cent, to 14,398.53 at the opening bell.
On Wednesday morning, Wall Street will get results from Goldman Sachs. A day earlier, Bank of America and Morgan Stanley saw gains on the back of their earnings and a positive outlook.
Goldman reported a profit of US$1.07-billion, or US$3.08 per share, for the quarter ended June 30, compared to US$2.79 billion, or US$7.73 per share, a year earlier. Goldman took a US$504-million writedown tied to its GreenSky business in the latest quarter.
After the close, Netflix and Tesla release their quarterly earnings.
“Netflix will reveal how well its password sharing ban ramped up subscriptions and Tesla will reveal how much money the company earned by selling a record number of cars at discounted prices to increase market share,” Swissquote senior analyst Ipek Ozkardeskaya said.
“There is potential for good surprises for both, but expectations for Netflix and Tesla are strong, so they will certainly be harder to beat than the banks – which had rather soft expectations walking into this earnings season.”
In Canada, labour issues are at the forefront after B.C. port workers returned to the picket lines on Tuesday after their union leadership rejected a tentative four-year deal announced last week.
The Globe’s Brent Jang reports that, even before picket lines went back up on Tuesday, business groups warned that it could take until late September or even longer to fully clear the backlog of cargo that has been piling up since Canada Day.
Elsewhere, unionized workers at 27 Metro grocery stores in the Greater Toronto Area reached a deal with the company shortly after midnight, averting a strike at those locations.
Overseas, the pan-European STOXX 600 was up 0.20 per cent by midday.
Britain’s FTSE 100 spiked 1.51 per cent after new figures showed that the annual rate of inflation eased to eased to 7.9 per cent in June from 8.7 per cent in May.
Germany’s DAX slid 0.30 per cent. France’s CAC 40 advanced 0.13 per cent.
In Asia, Japan’s Nikkei closed up 1.24 per cent. Hong Kong’s Hang Seng slid 0.33 per cent.
Commodities
Crude prices edged higher in early trading helped by continued expectations of a tight market and a vow from China to bolster economic growth.
The day range on Brent was US$79.37 to US$80.38 in the early premarket period. The range on West Texas Intermediate was US$75.40 to US$76.28.
“Crude prices are steadying here on expectations that the oil market will remain tight as Russian shipments drop and as China prepares to provide more support to households,” OANDA senior analyst Ed Moya said.
“With Russian flows falling to a six-month low, expectations are growing that OPEC+ will keep this market tight throughout the summer. "
Early Tuesday, China’s top economic planner said the country would roll out policies to “restore and expand” consumption in the world’s second-largest economy, which could boost oil demand, according to a Reuters report.
As well, figures released by the American Petroleum Institute showed weekly U.S. crude and distillate inventories fell, although a slower pace than analysts had been forecasting. U.S. crude stocks fell by 800,000 barrels last week.
More official U.S. government figures are due later this morning.
In other commodities, spot gold fell 0.1 per cent to US$1,977.63 per ounce by early Wednesday morning after hitting its highest since May 24 at US$1,984.19 during the previous session.
U.S. gold futures rose 0.1 per cent to US$1,981.70.
Currencies
The Canadian dollar was modestly weaker while its U.S. counterpart saw slight gains after touching a 15-month low earlier in the week.
The day range on the loonie was 75.84 US cents to 75.98 US cents in the early premarket period.
There were no major Canadian economic releases due Wednesday. On Tuesday, Statistics Canada reported that Canada’s annual inflation rate dropped to 2.8 per cent in June, a 27-month low.
“All in all, the data give the BoC little reason to move off the sidelines as it monitors how the economy develops in the next few months,” Shaun Osborne, chief FX strategist with Scotiabank, said.
On world markets, the U.S. dollar index was up slightly at 100.1 in early trading, rebounding from a 15-month low hit on Tuesday.
Britain’s pound dropped as much as 0.8 per cent against the U.S. dollar to US$1.2931, and also weakened versus the euro after figures showed British inflation fell more than expected in June and was at its slowest in more than a year at 7.9 per cent, Reuters reported.
The euro was steady at US$1.1222.
In bonds, the yield on the U.S. 10-year note was lower at 3.76 per cent ahead of the North American opening bell.
More company news
ATS Corp. says it has acquired Odyssey Validation Consultants Ltd., a company based in Ireland. Financial terms of the deal were not disclosed. Odyssey was founded in 2015. It has expertise in computer system validation and cloud-based software focused on the life sciences sector. -The Canadian Press
Britain’s competition regulator has provisionally cleared Broadcom’s $69-billion deal to buy VMware, it said on Wednesday, adding that it would not weaken competition in the supply of critical computer server products. The Competition and Markets Authority (CMA) in March raised concerns that the deal could make servers more expensive, prompting an in-depth investigation. “After examining the evidence gathered from Broadcom, VMware and other interested parties, an independent CMA panel has provisionally found the deal would not substantially reduce competition in the supply of server hardware components in the UK,” the regulator said. -Reuters
Activision Blizzard said on Wednesday it has extended the deadline for the close of its $69-billion takeover by Microsoft to Oct. 18 as the companies work to secure approval from the United Kingdom’s antitrust authority. The two U.S. companies had originally agreed to close the deal by July 18, but U.S. regulatory efforts to block the takeover and Britain’s push to restructure it have delayed the close. -Reuters
Microsoft said it would charge at least 53% more to access new artificial intelligence features in its widely used office software. The company also said it would make a more secure version of its Bing search engine available immediately to businesses, aiming to address their data-protection concerns, grow their interest in AI and compete more with Google. -Reuters
Economic news
Euro area and British CPI for June.
(830 am ET) U.S. housing starts.
With Reuters and The Canadian Press