Equities
Canada’s main stock index slid at Thursday’s opening bell with tech shares under pressure after BlackBerry forecast a decline in second-quarter revenue. Key U.S. indexes were also negative with inflation and interest rate concerns continuing to linger.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 21.18 points, or 0.1 per cent, at 20,205.78.
The Dow Jones Industrial Average fell 92.01 points, or 0.27 per cent, at the open to 34,351.18.
The S&P 500 opened lower by 30.93 points, or 0.69 per cent, at 4,434.55, while the Nasdaq Composite dropped 197.37 points, or 1.42 per cent, to 13,675.11 at the opening bell.
A surprisingly strong reading on the health of the U.S. services sector has added pressure to stocks this week. The Institute for Supply Management (ISM) said on Wednesday that its non-manufacturing Purchasing Managers’ Index rose to 54.5 last month. Markets were expecting a reading closer to 52.5. A measure of prices paid by service-sector businesses for inputs increased.
“The strong ISM data bolstered the speculation that the Federal Reserve could opt for another rate hike before the year end and keep the rates at restrictive levels for longer,” Swissquote senior analyst Ipek Ozkardeskaya said.
In this country, Bank of Canada’ Governor Tiff Macklem is scheduled to deliver an economic progress report later today in Calgary. Mr. Macklem’s remarks will be published on the bank’s website at 1:55 p.m. ET.
The address come a day after the central bank held interest rates steady following increases in June and July. However, The Globe’s Mark Rendell reports that the central bank also said it remains concerned about stubborn inflation and warned of future rate increases if consumer prices begin to accelerate again.
On the corporate side, Quebec-based convenience store operator Alimentation Couche-Tard Inc. says its net earnings for the first quarter of its financial year were US$834.1-million, down from US$872.4-million a year earlier. Earnings per diluted share were 85 US cents, unchanged from a year ago. The results were released after markets closed on Wednesday.
Canadian investors also got earnings this morning from Ski-Doo-maker BRP Inc.
The company said it earned $338.7-million or $4.26 a diluted share for the quarter ended July 31, up from $237.7-million or $2.94 a diluted share a year earlier. Revenue for the quarter totalled $2.78-billion, up from $2.44-billion in the same quarter last year. BRP also raised its profit forecast for the year.
Elsewhere, The Globe’s Susan Krashinsky reports this morning that Indigo Books & Music Inc. is undergoing another leadership shakeup with the resignation of its chief executive officer, Peter Ruis. Indigo announced Mr. Ruis’s departure on Thursday, saying that it is searching for a new CEO. “With Peter’s departure, the Board is focused on acting swiftly to determine the right leader to move the company forward,” a press release issued on Thursday morning stated.
Shares of BlackBerry, meanwhile, were down more than 13 per cent in early trading in Toronto after the company forecast a 21.4-per-cent decline in its second-quarter revenue due to weakness in its cybersecurity segment. In its preliminary results announcement for the quarter, the company said it expects revenue of about US$132-million, compared with US$168-million last year. Four analysts polled by LSEG expect BlackBerry to report sales of US$156.9-million, Reuters reported.
Overseas, the pan-European STOXX 600 was down 0.13 per cent around midday. Britain’s FTSE 100 edged up 0.18 per cent. Germany’s DAX slid 0.17 per cent while France’s CAC 40 added 0.11 per cent.
In Asia, Japan’s Nikkei fell 0.75 per cent, ending an eight-day winning streak. Hong Kong’s Hang Seng fell 1.34 per cent.
Commodities
Crude prices were slightly lower as demand concerns offset the impact of planned OPEC+ production curbs, announced earlier this week.
The day range on Brent was US$90.07 to US$90.89 in the early premarket period. The range West Texas Intermediate was US$86.91 to US$87.74.
Traders were sifting through mixed economic data from China Thursday which showed a decline in exports of 8.8 per cent in August, while imports slumped 7.3 per cent. However, crude imports to one of the world’s top consumers of oil jumped more than 30 per cent.
Later in the session, investors will get weekly U.S. government inventory data from the U.S. Energy Information Administration. The report is delayed by a day due to Monday’s market holiday.
Late Wednesday, the American Petroleum Institute reported that crude stocks fell by 5.5 million barrels for the week ended Sept. 1.
Gold prices were near their weakest level in about a week as the U.S. dollar held near recent highs. Spot gold was mostly flat at US$1,917.50 per ounce by early Thursday morning. U.S. gold futures edged 0.1 per cent lower to US$1,942.20.
Currencies
The Canadian dollar was modestly weaker in early trading while its U.S. counterpart continued to hover near its best levels in six months against a group of currencies.
The day range on the loonie was 73.23 US cents to 73.38 US cents in the early premarket period. The loonie touched a five-month low on Wednesday after the Bank of Canada held interest rates unchanged.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.05 per cent to 104.91, holding on to some of its gains from the previous session after hitting a six-month peak as the U.S. services sector unexpectedly gained steam in August, according to Reuters.
Britain’s pound slid 0.3 per cent to US$1.2472, hitting a three-month low.
The Australian dollar was little changed at US$0.6386, while the New Zealand dollar was up 0.2 per cent at US$0.5881. Both are trading near their recent 10-month lows.
In bonds, the yield on the U.S. 10-year note was down at 4.268 per cent.
More company news
Apple fell nearly 4 per cent on Thursday and sparked a selloff in tech stocks after reports that China has widened curbs on iPhone use by government staff in one of the U.S. company’s biggest markets. The world’s most valuable firm was set to lose around $100-billion in market value after suffering its worst one-day drop in more than a month on Wednesday.
Magna International on Thursday raised its sales forecast for fiscal 2025, on the back of sustained demand for parts, sensors and electrified powertrain systems. Demand for parts and sensors has picked up as automakers strive to push out more electrified vehicles with advanced driver aid systems such as driving monitoring systems, park assist and adaptive cruise control. The Canadian auto-parts supplier now expects its full-year 2025 total sales to be between US$46.7-billion and US$49.2-billion, compared with its prior forecast of US$44.7-billion and US$47.2-billion. -Reuters
Precision Drilling Corp. has signed an agreement to acquire CWC Energy Services Corp. in a deal valued at about $141-million including shares, cash and assumed debt. Precision CEO Kevin Neveu says the deal expands the company’s service business in both Canada and the U.S. with high-quality rigs and field personnel. The acquisition will add 62 marketed service rigs and seven marketed drilling rigs in Canada as well as 11 marketed drilling rigs in the U.S., including seven AC triple rigs. -The Canadian Press
Economic news
(8:30 a.m. ET) Canadian building permits for July.
(8:30 a.m. ET) U.S. initial jobless claims for week of Sept. 2.
(8:30 a.m. ET) U.S. productivity and unit labour costs for Q2.
(10 a.m. ET) U.S. quarterly services survey for Q2.
Bank of Canada Governor Tiff Macklem speaks in Calgary
With Reuters and The Canadian Press