Equities
Canada’s main stock index was treading water at Wednesday’s opening bell with weakness in energy and materials stocks tempering sentiment. On Wall Street, key indexes started in positive territory after a soft reading on U.S. hiring helped ease interest rate worries and U.S. Treasury yields saw a slight pullback after hitting multi-year highs.
At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 3.48 points, or 0.02 per cent, at 19,017.44.
In the U.S., the Dow Jones Industrial Average rose 31.80 points, or 0.10 per cent, at the open to 33,034.18.
The S&P 500 opened higher by 4.38 points, or 0.10 per cent, at 4,233.83, while the Nasdaq Composite gained 33.45 points, or 0.26 per cent, to 13,092.92 at the opening bell.
Rate concerns remain a top worry for investors. On Tuesday, a better-than-expected reading on U.S. job openings fuelled fears that the Federal Reserve would hold borrowing costs higher for a longer period. At the same time, the yield on the U.S. 10-year note hit its highest level since 2007 as the global bond rout continued. Early Wednesday morning the yield on the U.S. 10-year remained above 4.8 per cent before pulling back.
“The sharp rise in long term rates relative to short term rates suggests investors think that U.S. interest rates are likely to remain higher for longer due to the continued resilience of the U.S. economy,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“If this trend of rising long-term rates continues, then stock markets could well be in for even more volatility in the days and weeks ahead,” he said in a note.
On Wednesday morning, traders got a softer-than-forecast reading on private hiring in the U.S. economy in September from payroll services firm ADP. ADP said U.S. private payrolls rose by 89,000 last month, far fewer than the 150,000 analysts had been expecting.
Elsewhere, new figures released Wednesday morning showed home prices in the Greater Toronto Area rose in September for the first time in four months.
The average price of a GTA home rose 3.4 per cent in September from August to $1,119,428, the first increase since May, according to data from the Toronto Regional Real Estate Board. On a year-over-year basis, home prices were up 3 per cent but down 16.1 per cent from a high seen in February 2022.
On the corporate side, Barrick Gold said it will invest nearly US$2-billion as part of an expansion project to increase production at its Lumwana mine in Zambia.
Overseas, the pan-European STOXX 600 edged rose 0.34 per cent by midday. Germany’s DAX gained 0.23 per cent. France’s CAC 40 added 0.41 per cent while Britain’s FTSE 100 advanced 0.03 per cent.
In Asia, Japan’s Nikkei finished down 2.28 per cent. Hong Kong’s Hang Seng lost 0.78 per cent.
Commodities
Crude prices were lower in early trading as concerns about the impact of high interest rates on demand offset news that Saudi Arabia will maintain voluntary production curbs through to the end of the year.
The day range on Brent was US$89.83 to US$91.21 in the early premarket period. The range on West Texas Intermediate was US$88.11 to US$89.59.
“If you are wondering why oil prices are sliding in uber-tight supply conditions, look no further: the US economy is expected to slow down significantly, potentially to a rate below 1 per cent in the fourth quarter,” Stephen Innes, managing partner with SPI Asset Management, said.
“It may even stall early next year. This slowdown results from the impact of the 75-basis point jumbo interest rate hikes implemented by the Federal Reserve last year.”
Early Wednesday, Saudi Arabia said it would continue with voluntary crude output cuts through to the end of this year. The kingdom’s production for November and December will be about 9 million bpd, an energy ministry statement posted on the Saudi state news agency SPA said, according to a Reuters report.
The report comes as OPEC+ members gather on Wednesday for a ministerial meeting, which is expected to leave current production plans unchanged.
In other commodities, spot gold eased 0.2 per cent to US$1,819 per ounce by early Wednesday morning, while U.S. gold futures dropped 0.3 per cent to US$1,835.50. On Tuesday, bullion marked its seventh straight session of declines, touching its weakest level since March.
Currencies
The Canadian dollar was steady, trading near 73 US cents, amid tepid risk sentiment while its U.S. counterpart pulled back somewhat but remained near 11-month highs against a group of currencies.
The day range on the loonie was 72.85 US cents to 73.04 US cents in the early premarket period. The Canadian dollar is down about 1.4 per cent against the greenback over the past five days and is about 1-per-cent lower for the year to date.
On world markets, the U.S. dollar index, which weighs the U.S. currency against a basket of world counterparts, was down 0.12 per cent at 106.94. It remained close to the nearly 11-month high of 107.34 reached in the previous session, according to figures from Reuters.
The euro rose 0.15 per cent to US$1.0483. On Tuesday, the euro touched its weakest level since December, hitting US$1.0448.
Britain’s pound rose 0.1 per cent to US$1.2088, after falling to a nearly seven-month low of US$1.20535.
More company news
Tilray Brands Inc. reported a loss of US$55.9-million in its latest quarter compared with a loss of US$65.8-million a year earlier as its net revenue rose 15 per cent. The cannabis company, which keeps its books in U.S. dollars, says the loss amounted to 10 cents per diluted share for the quarter ended Aug. 31. The result compared with a loss of 13 cents per diluted share in the same quarter last year. Net revenue in what was Tilray’s first quarter totalled US$176.9 million, up from US$153.2 million a year earlier. -The Canadian Press
The largest shareholder of Aimia Inc. says it has become disillusioned and frustrated by the company’s board and management team, so it is planning to make a bid to take Aimia private in a deal that values the company at about $308-million. Under the proposal, Mithaq Canada Inc., a wholly-owned subsidiary of Mithaq Capital SPC, has offered $3.66 per share in cash for the stake in Aimia it does not already own. -The Canadian Press
Panama’s government authorized the withdrawal of a proposed contract to regulate operations of Canadian miner First Quantum’s local unit, Minera Panama, from Congress to make changes requested by lawmakers. President Laurentino Cortizo’s administration and the Canadian miner had agreed on the text of the contract to operate the key Cobre Panama copper mine in March, but it was awaiting the assembly’s approval. “We hope to work together with the company Minera Panama to agree on the phrasing needed to resolve the points indicated by the congress’ trade committee,” the presidency said in a post on social media X. -Reuters
Economic news
(8:30 a.m. ET) U.S. ADP National Employment Report for September.
(9:45 a.m. ET) U.S. S&P Global Services PMI for September.
(10 a.m. ET) U.S. factory orders for September.
(10 a.m. ET) U.S. ISM Services PMI for September.
With Reuters and The Canadian Press