Equities
Canada’s main stock index opened higher Tuesday with tech and utilities shares underpinning gains. Key U.S. index were also up in early trading ahead of key earnings from tech giants Alphabet and Microsoft after the close.
At 9:42 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 11.86 points, or 0.06 per cent, at 19,058.6.
In the U.S., the Dow Jones Industrial Average rose 0.81 per cent, to 33,202, the S&P 500 gained 0.74 per cent, to 4,248 and the Nasdaq Composite added 0.73 per cent, to 13,112.
After Tuesday’s close, Google parent Alphabet and Microsoft both report results with other big U.S. tech companies following later in the week. GM and Coke are among the big U.S. companies reporting before the start of trading.
“Together, 5 big tech names in the S&P 500 – Amazon, Alphabet, Apple, Microsoft and Nvidia - are expected to post a combined 34-per-cent rise in their earnings in the Q3 compared to the same time last year,” Swissquote Ipek Ozkardeskaya said.
“Because they have a heavy weight in the major U.S. indices, the Big Tech could offer investors yet another reason not to give up on the U.S. stocks. But keep in mind that without the Big 5, earnings for the S&P500 companies would be down by around 5 per cent.”
About 30 per cent of S&P 500 companies are scheduled to report earnings this week.
In Canada, Canadian National Railway reports results after the close of trading. Canadian Pacific Kansas City Ltd. reports on Wednesday.
Early Tuesday, Canadian miner Teck Resources reported an adjusted profit, excluding one-time items, of 76 cents a share for the three months ended Sept. 30, compared with the average analyst estimate of $1.09 per share, according to Refinitiv IBES data. Separately, Reuters reports that JSW Steel’s chief executive Jay Acharya says discussions over the potential purchase of a stake in Teck’s coal business have yielded “nothing concrete” at this point.
Overseas, the pan-European STOXX was up 0.18 per cent in midmorning trading. Britain’s FTSE 100 slid 0.07 per cent. Germany’s DAX added 0.18 per cent while France’s CAC 40 was up 0.57 per cent.
In Asia, Japan’s Nikkei added 0.20 per cent. Hong Kong’s Hang Seng lost 1.05 per cent.
Commodities
Crude prices were steady in early trading ahead of fresh U.S. inventory data and continued geopolitical uncertainties.
The day range on Brent was US$89.46 to US$90.68 in the early premarket period. The range on West Texas Intermediate was US$85.09 to US$86.30.
“Geopolitical risks have led to divergent movements in commodity markets,” Stephen Innes, managing partner with SPI Asset Management, said.
“Oil prices rallied last week, with WTI nearing US$90 per barrel. While geopolitical tensions have contributed to a rising geopolitical risk premium for oil, no physical oil supply disruptions have occurred, taking some of the heat out of the rally.”
Meanwhile, The Globe’s Emma Graney reports this morning that the International Energy Agency, in its latest world outlook, said demand for oil, coal and natural gas will peak this decade, as the share of fossil fuels in the global energy supply drops because of a “phenomenal rise” in the use of clean energy technologies.
The IEA says current climate policies around the world will help drive down the share of energy produced by fossil fuels to 73 per cent from 80 per cent by 2030.
Later in the session, traders will get the first of two weekly inventory reports with new data from the American Petroleum Institute. More official government numbers are due Wednesday morning.
A preliminary Reuters poll suggests analysts are expecting crude stocks to have risen last week.
In other commodities, spot gold was up 0.3 per cent at US$1,977.79 per ounce by early Tuesday morning, while U.S. gold futures edged up 0.1 per cent at US$1,989.00.
Currencies
The Canadian dollar was little changed, trading around the 73-US-cent mark, while its U.S. counterpart touched a one-month low against a group of currencies as Treasury yields eased.
The day range on the loonie was 72.99 US cents to 73.20 US cents in the predawn period.
On world markets, the U.S. dollar index, which tracks the U.S. unit against a basket of six currencies, was last up 0.04 per cent at 105.63. It fell to 105.35 earlier in the session, the lowest since Sept. 22, according to figures from Reuters.
The euro was 0.12-per-cent lower at US$1.0656 after new data showed euro zone business activity took a turn for the worse this month.
Britain’s pound was last up just under 0.1 per cent at US$1.2258.
In bonds, the yield on the U.S. 10-year note was up modestly at 4.867 per cent ahead of the North American opening bell. On Monday, the 10-year yield again breached 5 per cent before pulling back. Last week, the 10-year yield was briefly bid at a 16-year high of 5.001 per cent.
“We continue to see high volatility in the U.S. sovereign papers near important psychological levels where investors are invited to decide what to do next,” Swissquote’s Ipek Ozkardeskaya said in an early note.
“In this respect, the US 10-year yield shortly crossed above the 5 per cent psychological mark yesterday, then retreated sharply in a move that was qualified by a large short covering after two popular bond bears Bill Ackman and Bill Gross said that they covered their short bets on US Treasuries. Ackman said that ‘there is too much risk in the world to remain short bonds at current long-term rates’.”
More company news
General Motors on Tuesday withdrew its previous guidance for 2023 profits and near-term electric vehicle production as costs related to the United Auto Workers strikes jumped to US$200-million a week during October. GM’s third-quarter net income fell 7.3% to US$3.06-billion, while revenues rose 5.4% to US$44.1-billion. The adjusted earnings per share tracked by analysts of US$2.28 were ahead of Wall Street expectations, and up from US$2.25 a year ago because of the effect of share buybacks. -Reuters
3M Co on Tuesday raised its full-year adjusted profit forecast as it looks to benefit from cost-cutting measures and price hikes. The St. Paul, Minnesota-based company now expects adjusted earnings per share to be in the range of US$8.95 to US$9.15 per share, versus prior forecast of US$8.60 to US$9.10 per share. -Reuters
Coca-Cola Co raised its annual sales and profit forecasts on Tuesday, benefiting from consumers snapping up its sodas, juices and energy drinks at higher prices. Average selling prices rose 9% in the third quarter, the company said, while unit case volumes increased 2%. Coca-Cola’s shares rose about 2% in premarket trading. -Reuters
Economic news
(9:45 a.m. ET) U.S. S&P Global PMIs for October.
With Reuters and The Canadian Press