Equities
Canada’s main stock index opened up slightly Thursday, supported by gains in utilities stocks, although sentiment remained tentative. On Wall Street, key indexes saw modest early declines after the latest reading on weekly jobless claims showed a smaller-than-expected rise in the number of Americans filing for unemployment benefits.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 38.67 points, or 0.2 per cent, at 19,073.48.
In the U.S., the Dow Jones Industrial Average fell 30.32 points, or 0.09 per cent, at the open to 33,099.23.
The S&P 500 opened lower by 4.44 points, or 0.10 per cent, at 4,259.31, while the Nasdaq Composite dropped 7.89 points, or 0.06 per cent, to 13,228.12 at the opening bell.
“Markets are on an emotional rollercoaster ride this week,” Swissquote senior analyst Ipek Ozkardeskaya said. “The slightest data is capable of moving oceans.”
She noted that yesterday’s below-forecast reading on private hiring in the U.S. economy offered a typical ‘bad news is good news’ day, underpinning hopes that the Fed may not need to hike interest rates again to cool the economy. Attention now turns to Friday’s U.S. nonfarm payrolls figures. September jobs numbers in Canada are also due tomorrow morning. Figures released early Thursday showed the number of Americans applying for initial unemployment benefits rose 2,000 to a seasonally adjusted 207,000 last week. Economists had been expecting the number to rise to about 210,000.
“Everyone is now holding his or her breath into Friday’s [U.S.] jobs data, which will determine whether we will end this week with a sweet or a sour taste in our mouth,” she said.
“Sweet would be loosening jobs data, sour would be a still-strong jobs data which would fuel the hawkish Fed expectations and further boost U.S. yields while the U.S. yields are at a critical moment.”
Rising U.S. Treasury yields have pressured stocks through the week. By early Thursday morning, the yield on the U.S. 10 year note was little changed at 4.75 per cent. On Wednesday, the yield hit a 16-year high, touching 4.884 per cent.
On the corporate side, BlackBerry announced it would separate its Internet of Things (IoT) and cybersecurity business units and target a subsidiary initial public offering for the IoT business next fiscal year. The announcement came after Wednesday’s closing bell. Shares were down modestly in Toronto shortly after Thursday’s opening bell.
Overseas, the pan-European STOXX 600 was up 0.44 per cent around midday. Britain’s FTSE 100 advanced 0.59 per cent. Germany’s DAX and France’s CAC 40 edged up 0.18 per cent and 0.19 per cent, respectively.
In Asia, Japan’s Nikkei rose 1.8 per cent. Hong Kong’s Hang Seng edged up 0.10 per cent.
Commodities
Crude prices were down again in early trading after the previous session’s selloff on mounting demand concerns amid a tentative global economy.
The day range on Brent was US$85.14 to US$86.52 in the early premarket period. The range on West Texas Intermediate was US$83.51 to US$84.92.
Prices lost about US$5 a barrel yesterday amid broad economic concerns. A ministerial meeting of OPEC+ members yesterday saw the group make no changes to its current production plan, although Saudi Arabia and Russia reiterated that they would maintain current output curbs through to the end of the year.
“The 6-per-cent drop in Brent crude prices on Wednesday was due to a sharp drop in gasoline margins driven by weak U.S. Department of Energy data on gasoline demand,” Stephen Innes, managing partner with SPI Asset Management, said.
“Gasoline inventory builds have spilled over into crude markets amid concerns about a potential 2024 recession driven by rising interest rates and caused a shift in the crude futures curve that has negatively impacted prompt crude prices.”
In other commodities, spot gold was steady at US$1,821.64 per ounce by early Thursday morning. Gold has been down for the last eight sessions, hit by rising yields and a high U.S. dollar. U.S. gold futures gained 0.1 per cent to US$1,835.80.
Currencies
The Canadian dollar was weaker as crude prices slid and risk sentiment remained fragile while its U.S. counterpart steadied against a basket of world currencies.
The day range on the loonie was 72.53 US cents to 72.94 US cents in the early premarket period.
“Sharply lower oil prices are providing some added dead weight to the CAD,” Shaun Osborne, chief FX strategist with Scotiabank, said. “The cue for the sharp fall in WTI is a bit of a mystery (questions over demand, may be positioning, perhaps weaker gasoline prices).”
On world markets, the U.S. dollar index, which weighs the greenback against a group of global counterparts, was little changed at 106.75 by early Thursday morning, according to figures from Reuters. Earlier in the week, the index hit its highest level in 11 months.
The euro rose 0.06 per cent at US$1.0511, having falling on Tuesday to its lowest level this year at US$1.0448. The euro is down more than 14 per cent against the greenback over the last three months.
More company news
Suncor Energy said it will acquire French energy firm TotalEnergies’ Canadian operations for US$1.47-billion to bolster its bitumen production capacity. Suncor will buy the 31.23-per-cent interest held by TotalEnergies EP Canada in the Fort Hills oil sands mining project in northern Alberta, its total ownership to 100 per cent. “The transaction secures additional long-term bitumen supply to fill our Base Plant upgraders at a competitive supply cost, addressing a key uncertainty for the company,” Suncor CEO Rich Kruger said in a statement. -Reuters
Constellation Brands raised its annual profit target on Thursday, banking on higher prices and strong demand for its beers and spirits. The company now expects fiscal 2024 comparable earnings per share between US$12.00 and US$12.20, compared with its previous forecast of profit between US$11.70 and US$12.00 per share. -Reuters
Economic news
(8:30 a.m. ET) Canada’s merchandise trade balance for August.
(8:30 a.m. ET) U.S. initial jobless claims for week of Sept. 30.
(8:30 a.m. ET) U.S. goods and services trade deficit for August.
(10 a.m. ET) Canada’s Ivey PMI for September.
With Reuters and The Canadian Press