Equities
Canada’s main stock index opened higher Friday with improved crude prices supporting energy shares. On Wall Street, key indexes were also positive in early trading as investors weigh the hawkish tone of comments from Federal Reserve chair Jerome Powell and look ahead to fresh inflation data next week.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 46.04 points, or 0.24 per cent, at 19633.45. The index was down more than 1 per cent for the week heading into Friday’s session.
In the U.S., the Dow Jones Industrial Average rose 128.88 points, or 0.38 per cent, at the open to 34,020.82.
The S&P 500 opened higher by 16.80 points, or 0.39 per cent, at 4,364.15, while the Nasdaq Composite gained 49.74 points, or 0.37 per cent, to 13,571.19 at the opening bell.
On Thursday, Mr. Powell said the Fed is “not confident” that the central bank’s key rate is high enough to steadily reduce inflation and said it would raise rates again if it “becomes appropriate.” However, he also said it isn’t “appropriate” now to take that step. Last week, markets rallied after the Fed again hit pause on interest rates, raising hopes that more increases may not be in the cards. New U.S. inflation figures are due next Tuesday.
“While the Federal Reserve aims to approach further rate hikes cautiously, Powell made it clear that they are ready to act if necessary,” Stephen Innes, managing partner with SPI Asset Management, said.
“Looking forward, Powell suggested that a more substantial portion of progress in reducing inflation might need to come from tight monetary policy restraining aggregate demand growth,” Mr. Innes said.
In Canada, Bank of Canada senior deputy governor Carolyn Wilkins said during remarks in Vancouver on Thursday that Canadians need to be prepared for the likelihood interest rates won’t return to the low levels seen over the past 15 years.
On the corporate side, Canadian investors continue to get corporate results with earnings due this morning from Onex Corp. and Algonquin Power.
Overseas, the pan-European STOXX 600 was down 0.96 per cent by midday. Britain’s FTSE 100 fell 1.3 per cent. Germany’s DAX and France’s CAC 40 lost 0.64 per cent and 0.97 per cent, respectively.
In Asia, Japan’s Nikkei ended down 0.24 per cent. Hong Kong’s Hang Seng lost 1.76 per cent.
Commodities
Crude prices were firmer in the early premarket period but still set for a third consecutive weekly decline.
The day range on Brent was US$79.79 to US$80.86 in the early premarket period. The range on West Texas Intermediate was US$75.31 to US$76.48.
Both benchmarks are down more than 5 per cent for the week so far. The three-week losing streak is the longest for oil since a four-week run of losses this spring.
“The oil selloff probably went too far and it’s time for – at least – a minor positive correction,” Swissquote senior analyst Ipek Ozkardeskaya said in a note.
She said fears of escalating geopolitical tensions could help crude strengthen.
“But regarding that topic, the biggest fear of oil traders in Gaza was the implication of Iran in the war, which would then lead to another embargo on the Iranian oil, decrease the global supply and send prices higher,” she said.
“Now, the new market narrative is that, even if the Iranian oil gets banned, it doesn’t matter because first, the Iranian shipments have been falling due to weaker Asian demand and two, 90 per cent of the Iranian shipments go to China anyway, and China doesn’t care about the Iranian oil ban, they will continue buying it.”
In other commodities, gold prices were on track for a second week of losses.
Spot gold fell 0.2 per cent to US$1,954.60 per ounce by early Friday morning after hitting its lowest since Oct. 18 on Thursday. U.S. gold futures fell 0.5 per cent to US$1,959.70. Gold is down nearly 2 per cent for the week.
Currencies
The Canadian dollar was lower while its U.S. counterpart was on track for a weekly gain against a basket of world currencies.
The day range on the loonie was 72.37 US cents to 72.51 US cents. The Canadian dollar has fallen more than 1 per cent against the greenback over the past five days.
“With no domestic data ahead, external drivers will remain key influences on the direction of the market in the short run but downside potential for the CAD from here still looks limited to me,” Shaun Osborne, chief FX strategist with Scotiabank, said.
On world markets, the U.S. dollar index, which tracks the currency against six major peers, was little changed at 105.91 on Friday. It was on track to gain 0.81 per cent this week, after rising 0.39 per cent on Thursday, according to figures from Reuters.
The euro, meanwhile, was little changed at US$1.0669, after falling 0.4 per cent on Thursday.
Britain’s pound was down 0.1 per cent at US$1.2209, after data showed the U.K. economy stagnated in the third quarter, Reuters reported.
More company news
Aircraft parts maker Héroux‑Devtek Inc. says it earned $4.6-million in its latest quarter, down from $4.8-million in the same quarter last year, as its revenue rose nearly seven per cent. The Quebec-based company says the profit amounted to 14 cents per share for the quarter ended Sept. 30, compared with 14 cents per share a year earlier. Sales for what was the Héroux‑Devtek’s second quarter totalled $141.5-million, up from $132.7-million in the same quarter last year. -The Canadian Press
AtkinsRealis reported its third-quarter profit more than doubled compared with a year ago and raised its outlook for revenue growth. The company formerly known as SNC-Lavalin Group Inc. says its net income from continuing operations amounted to $105-million or 60 cents per diluted share for the quarter ended Sept. 30, up from a profit from continuing operations of $44.7-million or 25 cents per share in the same quarter last year. Revenue for the quarter totalled $2.20-billion, up from $1.89-billion a year earlier. -The Canadian Press
Canopy Growth Corp. says its net loss for the second quarter was $324.8-million, compared with $305.8-million a year earlier. The company says its net loss from continuing operations was $148.2-million, compared with $196.5-million during the same quarter last year. Revenues for the quarter were $82.1-million, down from $100.4-million a year earlier. -The Canadian Press
Economic news
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Survey for November.
(10:30 a.m. ET) Bank of Canada Senior Loan Officer Survey for Q3.
With Reuters and The Canadian Press
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