Equities
Canada’s main stock index opened higher Tuesday alongside improved metals prices. On Wall Street, key indexes saw modest early gains with traders awaiting results from big tech names after the close.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 16.32 points, or 0.08 per cent, at 20,598.44.
In the U.S., the Dow Jones Industrial Average rose 10.25 points, or 0.03 per cent, at the open to 35,421.49.
The S&P 500 opened higher by 0.55 points, or 0.01 per cent, at 4,555.19, while the Nasdaq Composite gained 34.37 points, or 0.24 per cent, to 14,093.24 at the opening bell.
On Tuesday, earnings will be in focus with Wall Street getting results from General Motors and General Electric ahead of the start of trading. Google-parent Alphabet and Microsoft release results after markets close.
“Focus is on whether, and by how much Microsoft benefited from the AI craze and how much AI boosted growth for Azure – which was under pressure since a couple of quarters due to macro factors,” Swissquote senior analyst Ipek Ozkardeskaya said.
“On Friday, a Goldman Sachs analyst reiterated his buy rating for MSFT and revised his price target from US$350 to US$400 a share. But because there is too much optimism in the market, it may be gently time to take profit, wait for the next bullish wave and rotate toward where the next action is expected to happen.”
General Electric, in reporting its latest results on Tuesday, raised its full-year adjusted profit forecast. The company now expects 2023 adjusted profit per share of US$2.10 to US$2.30, compared with its previous forecast of US$1.70 to US$2.00.
General Motors lifted its full-year profit outlook amid plans to invest less in new products and cut costs by another US$1-billion by the end of next year. GM said net income for the second quarter rose by nearly 52 per cent to US$2.6 billion, as revenue grew 25 per cent. GM said it now expects full-year net income of US$9.3-billion to US$10.7-billion, up from a previous forecast of US$8.4-billion to US$9.9-billion.
GE shares were up shortly after the start of trading in New York, while GM stock was weaker.
In Canada, markets will get earnings from Canadian National Railway Co. after the close of trading.
On the labour front thousands of B.C. port workers will get the details of a tentative agreement reached between their union and employers. Workers walked off the job on Canada Day and remained on the picket lines for 13 days. The BC Maritime Employers Association says the offer being presented is the same one leaders of the International Longshore and Warehouse Union had previously rejected, which briefly sent workers back to the picket line last week, The Canadian Press reports.
In the U.S., the Federal Reserve begins its two-day policy meeting which will culminate in the central bank’s rate decision on Tuesday. Markets are expecting another increase of a quarter point but traders will be watching for signals that the the tightening campaign is near an end.
Overseas, the pan-European STOXX 600 was up 0.33 per cent by midday. Britain’s FTSE 100 rose 0.26 per cent. Germany’s DAX and France’s CAC 40 advanced 0.11 per cent and 0.23 per cent, respectively.
In Asia, Japan’s Nikkei finished down 0.06 per cent. Hong Kong’s Hang Seng spiked 4.1 per cent.
Commodities
Crude prices traded near three-month highs, helped by vows from China to support that country’s economy while traders await the latest round of weekly U.S. inventory data.
The day range on Brent was US$82.22 to US$83.07 in the early premarket period. The range on West Texas Intermediate was US$78.29 to US$79.08.
Sentiment was helped after leaders in China vowed early this week to bolster economic policy support. China is one of the world’s top consumers of crude and has caused some concern in markets recently with economic data suggested a slowing economic recovery.
“Oil is also getting a boost from Wall Street as optimism grows the end of the Fed’s rate hiking campaign appears it could be here,” OANDA senior analyst Ed Moya said.
“With Europe lagging by a couple months, we could start seeing all the major economies eyeing easing as the next move. Market positioning probably has the oil trade look a lot more attractive than U.S. stocks, so if bullish momentum takes WTI crude to US$80, it could have decent momentum behind that move.”
Meanwhile, traders will get new U.S. crude inventory data from the American Petroleum Institute later in the day. That will be followed by more official weekly U.S. figures on Wednesday morning from the U.S. Energy Information Administration.
Analysts polled by Reuters expect that crude inventories fell by about 2 million barrels for the week ended July 21.
In other commodities, spot gold rose 0.3 per cent to US$1,961.13 per ounce by early Tuesday morning as markets await Wednesday’s rate decision from the Fed. U.S. gold futures were mostly flat at US$1,962.80.
Currencies
The Canadian dollar was steady while its U.S. counterpart saw modest declines against world currencies ahead of the Fed’s Wednesday rate decision.
The day range on the loonie was 75.87 US cents to 76.06 US cents in the early premarket period.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, was down 0.01 per cent at 101.34 early Tuesday morning. The index is up 1.38 per cent over the past five days but down 1.14 per cent over the last month.
In Europe, the pound rose 0.22 per cent to US$1.2854, its first day of gains after seven straight sessions of losses, according to figures from Reuters.
The euro rose 0.12 per cent to US$1.1076, after hitting a two-week low of US$1.1059 earlier in the session.
In bonds, the yield on the U.S. 10-year note was higher at 3.888 per cent ahead of the North American open.
More company news
U.S. industrial conglomerate 3M Co on Tuesday raised its full-year profit forecast, benefiting from higher prices and cost-cut measures including significant layoffs. The company, which makes everything from power tools to medical products, has been raising prices to offset a hit from mounting commodity costs. To counter the surge, 3M also reduced its total global workforce by 10% over two rounds of layoffs. The maker of ‘Scotch’ tape and ‘Post-it’ note said it now expects its full-year profit to be between US$8.60 and US$9.10 per share, up from its prior guidance of US$8.50 to US$9.00. -Reuters
Economic news
(8:30 a.m. ET) Canadian manufacturing sales for June.
(9 a.m. ET) U.S. S&P CoreLogic Case-Shiller Home Price Index (20 city).
(9 a.m. ET) U.S. FHFA House Price Index for May.
(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for June.
Also: U.S. Fed meeting begins
With Reuters and The Canadian Press