Equities
Canada’s main stock index opened higher Wednesday helped by strength in health-care stocks. Key U.S. indexes were also positive in early trading as traders parse the latest U.S. inflation figures, looking for clues about whether the Federal Reserve is done raising interest rates.
At 9:41 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 23.85 points, or 0.12 per cent, at 20,246.93.
In the U.S., the Dow Jones Industrial Average rose 21.29 points, or 0.06 per cent, at the open to 34,667.28.
The S&P 500 opened higher by 0.75 points, or 0.02 per cent, at 4,462.65, while the Nasdaq Composite gained 0.06 points to 13,773.67 at the opening bell.
U.S. inflation figures, released ahead of the North American open, were key for markets on Wednesday.
The report showed the annual rate of U.S. core inflation, which excludes food and energy, was 4.3 per cent in August, matching forecasts and down from July’s 4.7 per cent. On a monthly basis, core inflation in the U.S. economy rose by 0.3 per cent, ahead of the 0.2-per-cent increase markets had been expecting.
The overall rate of inflation rose to 3.7 per cent, ahead of forecasts and up from 3.2 per cent in July. Economists had been expecting to see the overall rate of inflation rise in August amid higher energy prices.
The numbers come ahead of next week’s Federal Reserve rate decision. Markets are expecting the U.S. central bank to hold steady at the September policy meeting but remain divided on whether it will hike again before the end of the year. The European Central Bank’s next policy announcement is due on Thursday.
“The broader data continue to suggest that the U.S. economy is slowing and, even if the path is a bit bumpy, we expect the Fed will hold,” CIBC economist Ali Jaffery said.
In Canada, investors got results from discount retailer Dollarama ahead of the start of trading.
Montreal-based Dollarama raised its full-year sales forecast as shoppers continue to look for cheaper options as price pressures persist. The retailer said it now expects comparable store-sales growth of between 10 per cent and 11 per cent for fiscal 2024, compared with between 5 per cent and 6 per cent estimated previously.
Elsewhere, The Globe’s Nicolas Van Praet reports SNC-Lavalin Group Inc. is changing its name to AtkinsRéalis as the Canadian engineering giant tries to forge a new corporate identity and move on from years of turmoil. Executives and company directors concluded the time is right to rebrand in order to reflect a significant shift in strategy, operations and internal culture after a decade of crisis, said chief executive officer Ian Edwards.
Overseas, the pan-European STOXX 600 was down 0.54 per cent by midday. Britain’s FTSE 100 lost 0.19 per cent. Germany’s DAX and France’s CAC 40 declined 0.51 per cent and 0.45 per cent, respectively.
In Asia, Japan’s Nikkei closed down 0.21 per cent. Hong Kong’s Hang Seng slipped 0.09 per cent, reversing early gains.
Commodities
Crude prices were higher, trading near their best levels in 10 months, as the latest forecast from the International Energy Agency suggested a tight market will continue through to the end of the year.
The day range on Brent was US$91.99 to US$92.84 in the early premarket period. The range on West Texas Intermediate was US$88.73 to US$89.64. Both benchmarks gained about 2 per cent on Tuesday and managed their highest levels since late 2022.
“The late-August and early-September rally [in crude prices] was quite powerful and if we have now seen a break higher after consolidation, it will also be interesting to see whether that momentum continues or it faces more resistance,” OANDA senior analyst Craig Erlam said.
Early Wednesday, the IEA stuck by estimates for demand growth and said the extension of voluntary production curbs by Saudi Arabia and Russia would continue a market deficit through the final quarter of this year.
“But from September onwards, the loss of OPEC+ production, will drive a significant supply shortfall through the fourth quarter,” it said in its monthly oil report.
Last week, OPEC+ members Saudi Arabia and Russia extended voluntary supply cuts of a combined 1.3 million bpd to year’s end.
Elsewhere, spot gold was down 0.2 per cent at US$1,910.30 per ounce by early Wednesday morning, having touched its lowest level since Aug. 25 at US$1,906.50 on Tuesday. U.S. gold futures slid 0.1 per cent to US$1,933.10.
Currencies
The Canadian dollar was down slightly, supported by higher crude prices but held back by tentative global risk sentiment, while its U.S. counterpart edged up.
The day range on the loonie was 73.65 US cents to 73.81 US cents in the predawn period. The loonie was up about 0.52 per cent against the greenback over the past five days as of early Wednesday morning.
“Crude oil continues to push higher on supply constraint worries and WTI is nearing US$90, the highest since November last year,” Shaun Osborne, chief FX strategist with Bank of Nova Scotia, said.
“Firmer energy prices are not having any obvious, positive impact on the CAD at the moment but they might add marginally to CAD tailwinds if the USD slips back.”
On world markets, the U.S. dollar index, which tracks the currency against six peers, was up 0.1 per cent at 104.70, according to figures from Reuters.
The euro slid 0.1 per cent to US$1.0742 ahead of the ECB meeting on Thursday. Britain’s pound declined 0.3 per cent to $1.2454, on track for its biggest daily drop in a week.
In bonds, the yield on the U.S. 10-year note was higher at 4.302 per cent ahead of the North American opening bell.
More company news
BP PLC chief executive Bernard Looney resigned on Tuesday with immediate effect after less than four years in the oil major’s top job for failing to fully disclose details of past personal relationships with colleagues, the company said. Chief financial officer Murray Auchincloss will act as CEO on an interim basis, BP said. Mr. Looney, 53, became CEO in February, 2020, with a vow to reinvent the 114-year-old company, laying out ambitious plans for the British energy giant to achieve zero net emissions by 2050, and to invest billions in renewable and low-carbon power. -Reuters
German premium footwear brand Birkenstock filed for an initial public offering in the United States, underscoring a pickup in the country’s equity markets and becoming the second big European company to seek a foreign listing this month. Its filing with the U.S. securities regulator did not disclose the financial details of the offering, but revealed that net revenue for the six months ended March 31 rose 19% to 644.17 million euros ($692.87 million) and profit fell 45.3% to 40.21 million euros. -Reuters
American Airlines Group on Wednesday cut its third-quarter adjusted profit forecast, to account for higher fuel costs and expenses related to its new collective bargaining agreement with the ALPA union. The carrier now expects an adjusted profit of between about 20 US cents to 30 US cents per share in the third quarter, down from its prior range of about 85 US cents to 95 US cents per share. -Reuters
Economic news
(8:30 a.m. ET) Canada’s national balance sheet and financial flow accounts for Q2.
(8:30 a.m. ET) U.S. CPI for August.
(2 p.m. ET) U.S. budget balance for August.
With Reuters and The Canadian Press