Equities
Canada’s main stock index opened up Friday alongside positive global sentiment, helped by gains in mining and energy stocks. On Wall Street, key indexes also saw a modest early advance amid optimism over prospects for a deal to raise the U.S. debt ceiling.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 81.01 points, or 0.4 per cent, at 20,378.1.
The Dow Jones Industrial Average rose 47.04 points, or 0.14%, at the open to 33,582.95.
In the U.S., the S&P 500 opened higher by 6.10 points, or 0.15 per cent, at 4,204.15, while the Nasdaq Composite gained 20.63 points, or 0.16 per cent, to 12,709.46 at the opening bell.
Markets continue to monitor the situation with talks to raise the U.S. debt limit and avert an historic default. U.S. President Joe Biden and House Speaker Kevin McCarthy have both indicated they don’t expect a default although negotiations have yet to result in a deal. The U.S. government could default on some debt as early as June 1 unless Congress votes to lift the debt ceiling. Reuters reports that Democratic negotiators told President Joe Biden they were making “steady progress” on an agreement.
“Traders are so fixated on the debt ceiling and regional banking fears that they are losing track of what could happen with inflation,” OANDA senior analyst Ed Moya said.
“Stocks are heading higher, but could soften if we continue to get more rounds of data that suggest the economy is not breaking.”
He noted markets are expecting the Federal Reserve to hold rates steady at its June meeting, but that could change if signs of rising inflation continue to emerge.
“The latest Fed speak has always suggested June was live and it is starting to look like if they get any hints inflation is stubborn and as long as a debt ceiling deal is reached, they could hike again,” he said.
In Canada, Onex-owned WestJet averted a disruptive strike ahead of the long weekend with an 11th hour deal with the union representing more than 1,800 pilots. WestJet had grounded much of its fleet on Thursday amid uncertainty over the labour situation. The Air Line Pilots Association said early Friday morning that union leaders voted to approve an agreement-in-principle, with a membership vote to begin in the days ahead.
On the economic side, Statistics Canada says retail sales fell 1.4 per cent in March, matching earlier estimates. Sales were down in five of nine subsectors. Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—increased 0.3 per cent in March, the agency said. Early estimates suggest a gain of 0.2 per cent in April.
In the U.S., Fed Chair Jerome Powell will appear on a panel discussion later this morning with ex-Chair Bernanke.
Overseas, the pan-European STOXX 600 was up 0.79 per cent by midday. Britain’s FTSE 100 gained 0.43 per cent. Germany’s DAX and France’s CAC 40 gained 0.74 per cent and 0.79 per cent, respectively.
In Asia, Japan’s Nikkei added 0.77 per cent. Hong Kong’s Hang Seng finished down 1.4 per cent.
Commodities
Crude prices edged higher, recouping some of the previous session’s losses, with optimism over the U.S. debt limit being raised offset somewhat by ongoing concerns about the future path of interest rates.
The day range on Brent was US$75.74 to US$76.78 in the early premarket period. The range on West Texas Intermediate was US$71.81 to US$72.80. Both benchmarks lost about 1 per cent on Thursday.
“On the macro level, oil markets are now torn between robust economic data from the US, soft data, and deflationary impulses from China,” Stephen Innes, managing partner with SPI Asset Management, said in a note.
“The problem is that supply, not demand, is hurting the bullish thesis with the ubiquitous dark fleets moving Russian and Iraqi oil to destinations worldwide and keeping inventories topped,” he said.
In other commodities, gold prices gained after three sessions of declines as the U.S. dollar pulled back.
Spot gold was up 0.4 per cent to US$1,964.85 per ounce by early Friday morning, after hitting its lowest since early April on Thursday.
U.S. gold futures rose 0.5 per cent to US$1,969.00.
Currencies
The Canadian dollar was higher while its U.S. counterpart pulled back against a group of world currencies but still held near its best level in two months.
The day range on the loonie was 73.99 US cents to 74.24 US cents in the predawn period. The Canadian dollar has advanced about 0.5 per cent against the greenback over the last five days.
On world markets, the U.S. dollar index was down 0.25 per cent at 103.33 early Friday morning after trading at its best level in two months. The index has gained more than 2 per cent over the past two weeks amid growing market uncertainty on the Federal Reserve’s next move on interest rates.
The euro was flat on the day at US$1.0773, near its lowest for seven weeks, while Britain’s pound eased 0.1 per cent to US$1.239, its lowest in a month, Reuters reports.
The Australian dollar rose 0.3 per cent to US$0.6644, while the New Zealand dollar rose 0.7 per cent to US$0.6258.
In bonds, the yield on the U.S. 10-year note was down slightly at 3.627 per cent early Friday morning.
More company news
The Globe’s Chris Hannay reports the federal Competition Bureau is suing Cineplex Inc. over allegedly misleading consumers by advertising online and mobile ticket prices without including mandatory booking surcharges that appear later in the purchase process. Canada’s biggest movie theatre chain introduced the $1.50 fee in June, 2022. The Competition Bureau said in a press release Thursday that the fee had generated “significant revenues” for Cineplex, alleging the company broke the law with misleading pricing.
Deere & Co on Friday raised its 2023 net income forecast, buoyed by healthy order books for the rest of the year as farm incomes remain robust. Shares of the company rose 4% in premarket trade. The company expects 2023 net income in the range of US$9.25-billion to US$9.50-billion, higher than the US$8.75-billion to US$9.25-billion forecast earlier. -Reuters
Walt Disney Co is scrapping plans to build a nearly US$1-billion corporate campus in central Florida that would have housed 2,000 employees, according to an e-mail to employees on Thursday, against the backdrop of its ongoing legal battle with Florida Governor Ron DeSantis. Disney parks chief Josh D’Amaro said “changing business conditions” prompted Disney to reconsider its 2021 plan to relocate employees, including its Imagineers who design theme park rides, to a new campus in Lake Nona. -Reuters
Brookfield Asset Management will sell two commercial properties in India to a partnership of its locally listed REIT Brookfield India and Singapore sovereign wealth fund GIC in a deal with an enterprise value of US$1.4-billion. The properties being acquired are in India’s financial capital Mumbai, Maharashtra, and Gurugram, a satellite city of the national capital region. -Reuters
Shares of Foot Locker Inc plunged 25% premarket on Friday, after the footwear retailer cut its annual sales and profit forecasts reeling under a sharp drop in demand and a hit from heavy discounts aimed at clearing excess inventories. The company also missed Wall Street estimates for its first-quarter results and named former Kohl’s Corp executive Mike Baughn its new finance chief, effective June 12. -Reuters
Economic news
(8:30 a.m. ET) Canadian retail sales for March.
(10 a.m. ET) U.S. quarterly services survey for Q1.
(11 a.m. ET) U.S. Fed Chair Jerome Powell joins a panel on “Perspectives on Monetary Policy” in Washington.
Also: G7 summit in Hiroshima begins (through Sunday).
With Reuters and The Canadian Press
Terry Weber