Equities
Canada’s main stock index opened down for a third day on Thursday as traders sort through a mixed bag of earnings from some of the country’s biggest banks. On Wall Street, the tech-heavy Nasdaq jumped at the opening bell, buoyed by a rally in Nvidia stock on the back of a strong forecast.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 95 points, or 0.48 per cent, at 19,832.69.
In the U.S., the Nasdaq Composite rose 222.28 points, or 1.78 per cent, to 12,706.44 at the opening bell.
The Dow Jones Industrial Average rose 54.34 points, or 0.17 per cent, at the open to 32,854.26, while the S&P 500 opened higher by 40.47 points, or 0.98 per cent, at 4,155.71.
Markets continue to be dominated by continuing talks to raise the U.S. debt ceiling. The latest worry came after ratings agency Fitch put the U.S. ‘AAA’ debt ratings on negative watch, with a downgrade possible if lawmakers fail to reach an agreement to lift the debt ceiling, Reuters reported.
“The House Speaker [Kevin McCarthy] and President [Joe] Biden have one thing in common, and that is that they are both playing the blame game,” Naeem Aslam, chief investment officer with Zaye Capital Markets, said in a note.
“McCarthy made traders more nervous by saying that Republicans are ready to leave town. Although he did balance his statement by saying that conversations are making progress, traders are tired of these false hopes and only believe in material results, and the fact is that today the chances of an accident taking place due to a failure to achieve a deal over the U.S. debt ceiling are equally as high as they were a few weeks ago.”
In Canada, bank earnings continue with results from Royal Bank, CIBC and TD.
The Globe’s Stefanie Marotta reports this morning that RBC earned $2.65 per share, adjusted to exclude certain items. That fell below the $2.80 per share analysts expected, according to Refinitiv. CIBC, meanwhile, said it earned $1.70 per share, excluding one-time items. That edged out the $1.62 per share analysts expected, according to Refinitiv. TD’s adjusted per-share earnings came in at $1.94 per share in the latest quarter. That fell below the $2.08 per share analysts expected, according to Refinitiv.
Shares of Royal Bank and TD opened lower in Toronto while CIBC stock was up.
On Wednesday both Bank of Nova Scotia and Bank of Montreal reported second-quarter results that fell short of analysts forecasts, hit by economic uncertainty, higher interest rates and inflationary pressures.
Elsewhere, shares of semiconductor giant Nvidia were up more than 23 per cent in morning trading after the company forecast second-quarter revenue more than 50 per cent above analysts’ forecasts and said it is boosting supply to meet demand for artificial intelligence chips.
Overseas, the pan-European STOXX 600 was up 0.15 per cent by afternoon. Early Friday, Germany reported that its economy contracted in the first quarter of the year, putting the country in a recession following negative growth in the fourth quarter.
Britain’s FTSE 100 fell 0.29 per cent. Germany’s DAX was flat and France’s CAC 40 edged up 0.03 per cent.
In Asia, Japan’s Nikkei closed up 0.39 per cent. Hong Kong’s Hang Seng lost 1.93 per cent to finish at its lowest level this year.
Commodities
Crude prices were down in early trading after Russian Deputy Prime Minister Alexander Novak cast doubt on the prospect of more OPEC+ production cuts when it meets next week.
The day range on Brent was US$77.45 to US$78.50 in the early premarket period. The range on West Texas Intermediate was US$73.32 to US$74.37.
Both benchmarks were down more than 1 per cent in the predawn period.
“I don’t think that there will be any new steps, because just a month ago certain decisions were made regarding the voluntary reduction of oil production by some countries...” Novak was quoted as saying by Izvestia newspaper, according to a Reuters report.
Earlier in the week, Saudi Arabia’s energy minister had suggested a cut to output could be possible, telling short sellers to “watch out”.
OPEC+ members are scheduled to meet June 4.
In other commodities, spot gold was flat at US$1,957.89 per ounce by early Thursday morning. U.S. gold futures fell 0.2 per cent to US$1,960.70.
Currencies
The Canadian dollar was modestly lower while its U.S. counterpart hit a fresh two-month high amid concern over protracted debt ceiling talks.
The day range on the loonie was 73.45 US cents to 73.60 US cents in the early premarket period.
“The CAD continues to range trade against the USD, with little end in sight to the broader, sideways chop that has characterized spot movement in the past few months,” Shaun Osborne, chief FX strategist with Scotiabank, said in an early note.
There were no major Canadian economic reports due Thursday.
On world markets, the U.S. dollar index, which measures the currency against six major peers, rose as much as 0.3 per cent to 104.16, the highest since March 17, according to figures from Reuters.
The euro fell 0.2 per cent, touching a two-month low at US$1.0715.
Britain’s pound eased 0.1 per cent, after briefly hitting its weakest since April 3 at US$1.2332, Reuters reported.
More company news
Best Buy Co Inc on Thursday beat quarterly profit estimates, as its promotional programs aided higher sales even as a pull back in discretionary spending hit other retailers. Shares of the top U.S. electronics retailer were up 5% in premarket trading as Best Buy also maintained its full-year profit and revenue forecasts.
Economic news
(8:30 a.m. ET) Canada’s Survey of Employment, Payrolls, and Hours for March.
(8:30 a.m. ET) Canadian manufacturing sales for April.
(8:30 a.m. ET) U.S. initial jobless claims for week of May 20. Estimate is 250,000, up 8,000 from the previous week.
(8:30 a.m. ET) U.S. real GDP for Q1.
(8:30 a.m. ET) U.S. pretax corporate profits for Q1.
(10 a.m. ET) U.S. pending home sales for April.
(11 a.m. ET) U.S. Kansas City Fed Manufacturing Activity for May
With Reuters and The Canadian Press