Equities
Canada’s main stock index opened down Tuesday with financials under pressure in the wake of Scotiabank’s latest results. On Wall Street, key indexes also started on the back foot as investors await comments from a number of Federal Reserve officials.
At 9:37 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 64.85 points, or 0.32 per cent, at 19,967.81.
In the U.S., the Dow Jones Industrial Average fell 1.34 points at the open to 35,332.13.
The S&P 500 opened lower by 4.88 points, or 0.11 per cent, at 4,545.55, while the Nasdaq Composite dropped 16.39 points, or 0.12 per cent, to 14,224.63 at the opening bell.
“It is becoming increasingly apparent that markets believe that we will start to see [U.S.] rate cuts by the middle of next year, despite the attempts of various Fed officials to push back on this idea,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“Today it will be the turn of Fed governors Christopher Waller and Michelle Bowman, along with the Chicago Fed President Austan Goolsbee who will be tasked with pushing the ‘higher for longer’ narrative that the central bank will want to maintain.”
In Canada, the country’s biggest lenders move to the forefront with the start of a week of bank earnings.
Scotiabank reported results this morning with the remainder of Canada’s banks releasing earnings through the rest of the week. Ahead of the results, analysts have been forecasting that earnings will fall between 3 per cent and 7 per cent year-over-year in the fourth quarter, hit by higher costs, increased risks and weaker loan growth.
The Globe’s Stefanie Marotta reports this morning that Scotiabank’s fourth-quarter profit fell short of analysts’ forecasts amid a jump in loan loss reserves and higher expenses.
Scotiabank earned $1.4-billion, or $1.02 per share, in the three months that ended Oct. 31. That compared with $1.63 per share, in the same quarter last year. Adjusted to exclude certain items, the bank said it earned $1.26 per share. That fell below the $1.65 per share analysts expected, according to Refinitiv. Shares were down about 4 per cent shortly after the opening bell in Toronto.
Quebec-based convenience store operator Alimentation Couche-Tard Inc. is scheduled to report results after the close of trading.
Overseas, the pan-European STOXX 600 was down 0.61 per cent in afternoon trading. Britain’s FTSE 100 slid 0.28 per cent. Germany’s DAX and France’s CAC 40 lost 0.17 per cent and 0.59 per cent, respectively.
In Asia, Japan’s Nikkei ended down 0.12 per cent. Hong Kong’s Hang Seng fell 0.98 per cent.
Commodities
Crude prices were up in early trading ahead of this week’s OPEC+ meeting, with expectations growing that the group will deepen current production curbs.
The day range on Brent was US$79.84 to US$80.95 in the early premarket period. The range on West Texas Intermediate was US$74.70 to US$75.84. Both benchmarks were up more than 1 per cent in the predawn period.
“The OPEC+ meeting will be this week’s most impactful event in oil markets,” OANDA senior analyst Craig Erlam said.
“Not just because any decision could have direct consequences for price and therefore inflation but also due to the meeting already being pushed back by four days, so there’s clearly some disagreement within the alliance.”
He said the group has always found a way to get an agreement over the line before, “even if that means the biggest producers taking on more of the additional commitments so it’s probably safe to say something similar will be achieved this week.”
The meeting was delayed until Thursday reportedly to allow the grow to address disagreements over production targets for African members. Reuters reported Friday that progress was being made in addressing those concerns.
Elsewhere, traders will get the first of two weekly U.S. inventory reports later today with the release for fresh data from the American Petroleum Institute. More official government figures follow on Wednesday morning.
Analysts polled by Reuters expect that crude inventories fell by about 2 million barrels last week.
In other commodities, gold prices were steady after hitting a six month high.
Spot gold was little changed at US$2,013.29 per ounce early Tuesday morning, after hitting the highest level since May 16.
U.S. gold futures for December delivery edged 0.1-per-cent higher to US$2,013.40 per ounce.
Currencies
The Canadian dollar was higher while its U.S. counterpart was trading near three-month lows against a group of currencies and looked set for its worst monthly performance in a year.
The day range on the loonie was 73.40 US cents to 73.62 US cents ahead of the North American opening bell. The Canadian dollar has gained more than 2 per cent against its U.S. counterpart over the past month.
On world markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, was down 0.02 per cent at 103.18 by early Tuesday morning.
The index is down more than 3 per cent for the month so far.
The euro and Britain’s pound were broadly steady with the common currency at US$1.09495 and sterling at US$1.2627, both around their highest in about three months, according to figures from Reuters.
In bonds, the yield on the U.S. 10-year note was slightly higher at 4.396 per cent in the predawn period.
More company news
Canadian miner First Quantum’s contract to operate a lucrative copper mine in Panama is unconstitutional, Panama’s top court said in a ruling made public on Tuesday. Challenges against the company’s new contract, which was approved in October, piled up in court following public protests against the deal. -Reuters
Canadian oil and gas pipeline company TC Energy Corp said on Tuesday it expects adjusted core earnings for 2024 to be 5% to 7% higher than 2023. While global natural gas prices have slumped compared to last year, prices are still high enough for companies to produce profitably, boosting demand for pipelines. TC Energy’s capital expenditure is expected to be between $8-billion and $8.5-billion next year, lower than its estimated cost of $12-billion to $12.5-billion in 2023. -Reuters
General Motors is to scale back spending on its self-driving unit Cruise after a pedestrian accident last month, Financial Times reported on Tuesday. GM and Cruise did not immediately respond to Reuters’ request for a comment. In October, one of Cruise’s driverless cabs was not able to stop in time from hitting a pedestrian who had been struck by a hit-and-run driver, raising safety concerns around the use of robotaxis. -Reuters
Economic news
(9 a.m. ET) U.S. S&P CoreLogic Case-Shiller Home Price Index (20 city) for September.
(9 a.m. ET) U.S. FHFA House Price Index for September.
(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for November
With Reuters and The Canadian Press
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