Equities
Canada’s main stock index opened up Monday with financial and real estate stocks advancing. On Wall Street, key indexes also saw early gains with corporate earnings in focus.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 34.88 points, or 0.18 per cent, at 19,497.74.
In the U.S., the Dow Jones Industrial Average rose 162.13 points, or 0.48 per cent, at the open to 33,832.42.
The S&P 500 opened higher by 14.59 points, or 0.34 per cent, at 4,342.37, while the Nasdaq Composite gained 46.57 points, or 0.35 per cent, to 13,453.81 at the opening bell.
Earnings remain in focus on Wall Street this week after JPMorgan, Citigroup and Wells Fargo all posted solid results last week. Charles Schwab Corp. reported this morning followed by Bank of America and Goldman Sachs on Tuesday. Netflix and Tesla both report Wednesday afternoon.
“The first set of bank results released last Friday looked good, although the outlook remained dark and cloudy,” Swissquote senior analyst Ipek Ozkardeskaya said.
“But this earnings season will likely remain under the shadow of mounting geopolitical tensions in the Middle East and a broad-based discomfort and lack of appetite that comes along with it,” she said.
Ahead of the opening bell, Charles Schwab said, excluding one-time costs, profit fell 31 per cent year-over-year, to US$1.52-billion, or 77 US cents per share, for the three months ended Sept. 30. Analysts had expected 74 US cents per share, according to LSEG data.
In Canada, investors will get the Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations for the third quarter this morning. The surveys are scheduled for release just after the start of trading.
“The focus in the Business Outlook Survey/Survey of Consumer Expectations will be on firms’ price-setting behavior and firms/consumers’ inflation expectations,” Alvin Tan, Asian FX strategist with RBC, said in a note.
“Recent surveys have suggested that firms’ price-setting behaviour was becoming less frequent, and BoC’s Deputy Governor [Nicolas] Vincent reiterated earlier this month that a return to ‘normal’ price-setting behaviour is needed to get inflation sustainably back to target.”
The week’s key economic report comes on Tuesday morning with the release of September inflation data from Statistics Canada. Mr. Tan says RBC’s economists are expecting the annual rate of inflation to ease to 3.8 per cent from 4 per cent in August.
On the corporate side, Suncor CEO Rich Kruger is scheduled to appear before the Natural Resources parliamentary committee Monday. The committee has asked Kruger to explain remarks he made to investors in August, when he said Suncor has had a “disproportionate emphasis” on the energy transition and that the way for the company to win is to refocus on its key oilsands assets, The Canadian Press reported.
Overseas, the pan-European STOXX 600 was up 0.15 per cent by late morning. Britain’s FTSE 100 edged up 0.38 per cent. Germany’s DAX and France’s CAC 40 rose 0.07 per cent and 0.14 per cent, respectively.
In Asia, Japan’s Nikkei closed down 2.03 per cent. Hong Kong’s Hang Seng lost 0.97 per cent.
Commodities
Crude prices steadied in early trading after spiking last week amid uncertainty over the Israel-Hamas war.
The day range on Brent was US$90.06 to US$91.20 in the early premarket period. The range on West Texas Intermediate was US$86.97 to US$87.98.
Prices jumped almost 6 per cent on Friday, the biggest daily rise since April. Both Brent and WTI were up sharply for the week.
“While oil prices are bouncing to the geopolitical beat, key macro trends emerging last week were not so bullish — reduced global oil demand due to unseasonably warm weather is compounded by OPEC countries increasing their net seaborne exports,” Stephen Innes, managing partner with SPI Asset Management, said.
In other commodities, gold prices fell after rallying on Friday, but remained above the key US$1,900-an-ounce level.
Spot gold dipped 1.1 per cent to $1,910.70 per ounce by early Monday morning and U.S. gold futures dropped 0.9 per cent to $1,924.20. Prices rallied more than 3 per cent on Friday as geopolitical tensions raised its safe-haven appeal.
Currencies
The Canadian dollar edged higher while its U.S. counterpart slid against a group of currencies but still held near one-week highs.
The day range on the loonie was 73.16 US cents to 73.35 US cents in the early premarket period.
On world markets, the U.S. dollar index eased 0.08 per cent to 106.47, but held close to highs touched on Friday, with investors also waiting to hear a speech by Federal Reserve Chair Jerome Powell later this week for clues on the U.S. interest rate outlook, Reuters reports.
Investors will get remarks from Federal Reserve chair Jerome Powell later in the week.
Both the euro and Britain’s pound were off one-week lows seen Friday. The euro was last up 0.2 per cent at US$1.05233. Sterling gained 0.15 per cent to US$1.2163.
In bonds, the yield on the U.S. 10-year note was higher at 4.687 per cent in the predawn period.
More company news
Canada’s Tourmaline Oil said on Monday it will acquire Bonavista Energy for $1.45-billion. The Bonavista assets are an extension of Tourmaline’s existing operations in the Deep Basin where Tourmaline is already the largest producer. Following closing of the acquisition, expected in the second half of November, Tourmaline expects to exit 2023 with production of more than 600,000 barrels of oil equivalent per day. -Reuters
Flexible workspace provider WeWork Inc on Monday appointed David Tolley as its chief executive officer. Tolley has served as a WeWork board member since February 2023 and as interim CEO since May 2023. -Reuters
Major U.S. pharmacy chain Rite Aid said Sunday that it has filed for bankruptcy and obtained US$3.45-billion in fresh financing as it carries out a restructuring plan while coping with falling sales and opioid-related lawsuits. In 2022, Rite Aid settled for up to $30 million to resolve lawsuits alleging pharmacies contributed to an oversupply of prescription opioids. It said it had reached an agreement with its creditors on a financial restructuring plan to cut its debt and position itself for future growth and that the bankruptcy filing was part of that process. -The Associated Press
Shares of Pfizer and German partner BioNTech fell on Monday after the U.S. drugmaker slashed the sales forecast for its COVID vaccine and therapy last week, and some analysts said the reduction was bigger than expectations. Hit by a plunge in the use of pandemic-related products, Pfizer on Friday reduced its full-year forecast for sales of its antiviral COVID treatment Paxlovid by about US$7-billion, and for the vaccine it developed with BioNTech by about US$2-billion. Pfizer said it will take a non-cash charge of US$5.5-billion in the third quarter due to US$4.6-billion in inventory write-offs for Paxlovid and US$900-million of write-offs for the vaccine, while BioNTech flagged write-downs of up to 900 million euros (US$947-million). -Reuters
Economic news
(8:30 a.m. ET) Canada’s manufacturing sales and orders for August.
(8:30 a.m. ET) Canadian wholesale trade for August.
(8:30 a.m. ET) U.S. Empire State Manufacturing Survey for October.
(10:30 a.m. ET) Bank of Canada’s Business Outlook Survey and Survey of Consumer Expectations for Q3.
With Reuters and The Canadian Press