Equity Markets
Canada's main stock index was little changed on Friday, with energy stocks offsetting modest declines among some financial stocks.
The Toronto Stock Exchange's S&P/TSX composite index was up 2.29 points, or 0.01 per cent, at 16,079.80 after opening marginally weaker.
Half of the index's 10 key groups were little changed.
Canada's main stock index retreated for a second straight day on Thursday, as materials and financial shares lost ground and worries about the prospects of U.S. tax reform weighed on Wall Street.
The S&P and the Nasdaq were lower at the open on Friday as investors worried about a delay in corporate tax cuts, while losses on the Dow were limited by a rise in Walt Disney's shares.
The Dow Jones Industrial Average fell 16.1 points, or 0.07 per cent, to 23,445.84. The S&P 500 lost 4.57 points, or 0.17 per cent, to 2,580.05. The Nasdaq Composite dropped 12.97 points, or 0.19 per cent, to 6,737.08.
Senate Republicans have unveiled a tax-cut plan that would delay lowering corporate rate to 20 percent by a year and provide small-business owners with a deduction rather than a special business rate.
The Senate Republicans version of the bill differs markedly on corporate, business and individual tax cuts from legislation detailed by their counterparts in the House of Representatives.
The S&P 500 index has surged more than 20 per cent since the 2016 presidential election, fueled by Trump's promises.
All three major indexes were on track to end lower for the week, with the S&P and the Dow on track to post weekly losses after eight straight weeks of gains.
The S&P 500 is trading at 18 times expected earnings, expensive compared with its 10-year average of 14.3, according to Thomson Reuters Datastream. Cutting corporate taxes would boost earnings and make stocks relatively less expensive.
Overnight, world stocks were mostly lower, pulled down by reports that U.S. tax reforms could be delayed. Senate Republicans have released a tax-reform plan that differs significantly from that of members of the House of Representatives.
"The twists and turns in Congress regarding the administration's tax plan are hard to follow, but the overall impression is that we won't get much progress on reform before the Thanksgiving recess begins," LG chief market analyst Chris Beauchamp said. " For a market that had invested great hope in the plan, this is a heavy blow. The rally had been looking increasingly precarious, as breadth deteriorated over the past week, with yesterday's drop an inevitable consequence of underlying weakness."
U.S. Republican senators say they want to cut the corporate tax rate in 2019, later than the time line proposed by the House. The House votes next week on its measure. No date has been set for a Senate vote.
On Bay Street, earnings season begins to wind down. According to Thomson Reuters data, said 168 TSX companies have now reported third-quarter results. About 77 remain. Of those reporting, about 49 per cent have beaten forecasts on earnings and 43 per cent have topped on revenue. By sector, about 73 per cent of financials on the TSX have topped profit forecasts, although the country's biggest banks have yet to report. The data also show that 67 per cent of telecom companies have exceeded analysts expectations. On the flip side, utilities saw just 22 per cent of companies beat forecasts with 78 per cent falling short in the quarter.
In individual earnings, J.C. Penney shares jumped after the retailer posted same-store sales ahead of analysts' forecasts in the latest quarter. The U.S. retailer said comparable sales were up 1.7 per cent. Analysts were looking for an increase of between 0.6 per cent and 0.8 per cent. However, the company also posted a wider net loss of $128-million or 41 cents. Shares were up more than 9 per cent in premarket trading.. On this side of the border, investors got a look at Hydro One results before the bell. The energy company posted earnings per share of 37 cents in the latest quarter and adjusted earnings per share of 40 cents.
Elsewhere, Friday's session will play out against a backdrop of continued trade struggles. Reports early Friday said a planned meeting of leaders of the 11 countries in the Trans Pacific Partership didn't take place. Leaders were reportedly at odds about how to proceed after the U.S. withdrew from the pact. Reports also suggest that Canadian Prime Minister Justin Trudeau failed to show up for the meeting, set to take place on the sidelines of the Asia Pacific Economic Co-operation summit in Vietnam. Canada has said previously that it wouldn't be rushed into an agreement.
Overseas, the MSCI global stock index was off slightly overnight. The index had been headed for its longest winning streak since 2003, but a losing day on Thursday put the breaks on that run. In Europe, the pan-European STOXX 600 index was heading for its worst week in three months, trading lower early on and falling for its fourth day in a row.
Britain's FTSE was down 0.53 per cent, with luxury fashion brand Burberry losing more than 23 per cent. That stock has been hit by a brand reset which is aimed at moving the company more upmarket and cutting sales to non-luxury stores. Germany's DAX was down 0.24 per cent. France's CAC 40 was off 0.28 per cent.
In Asia, stocks followed Wall Street lower with Japan's Nikkei finishing down 0.82 per cent. Hong Kong's Hang Seng ended down 0.05 per cent and the Shanghai composite index lost 0.16 per
Commodities
Oil prices were mostly steady early with the expectation of extended OPEC production cuts helping keep prices near their best levels in two years. West Texas Intermediate wavered around break even with a day range of $56.97 (U.S.) to $57.30. Brent crude was modestly positive with a day range of $63.70 to $64.27. Earlier in the week, Brent touched a two-year high of $64.64. WTI, meanwhile, was just below the week's best level of $57.92, also a two-year best.
CMC Markets U.K. analyst David Madden noted that talk that Saudi Arabia is going to trim exports in December is also helping support crude prices.
"The oil producing nation has been in the news a lot recently," Mr. Madden said in a note. "A clampdown in corruption and souring relations with Iran has given traders case for concern about future supply levels. The OPEC meeting at the end of the month will be closely watched, and the Saudi's are hinting at extending the oil production cut, so the bullish move could last."
The OPEC meeting is sheduled for Nov. 30 in Vienna. Markets are widely expecting the cartel will extend current production caps - aimed at curbing the market overhang - beyond the current March end.
"Clearly the market is still convinced that OPEC will succeed in tightening the market to a sufficient extent by extending its production cuts. Attention is therefore paid to any news that supports this view," Commerzbank analysts said.
"Even significantly weaker Chinese crude oil imports in October and an increase in U.S. crude production to a record level failed to exert any lasting pressure on oil prices."
In other commodities, gold prices were heading for their first weekly rise in a month as the U.S. dollar weakened on market concerns over the U.S. tax overhaul. Spot gold was little changed at last check, but still up more than 1 per cent for the week. U.S. gold futures were slightly weaker. Traders have noted that climbing equities have tempted investors away from gold, but concerns that a correction could be on the horizon has led some back to the precious metal.
Reuters also notes that a sharp rise in U.S. bond yields on Friday limited gains by reducing the attractiveness of non-yielding bullion.
"Rising bond yields are not good for gold," Saxo Bank analyst Ole Hansen said. "But the market will be more focused on the risk of a potential stock market correction than the risk of higher yields."
In other metals, silver prices were flat. London copper prices were just above one-month lows.
Currencies and bonds
The Canadian dollar was just beneath the 79-cent (U.S.) level ahead of the North American opening bell, shifting higher as its U.S. counterpart wavers on concern corporate tax cuts in the U.S. could be delayed. The day range on the loonie is a fairly narrow 78.81 cents to 78.95 cents.
"With no data releases scheduled today, USD/CAD is likely to track broader moves in the (U.S.) dollar along with rate differentials once again," Sue Trinh, RBC's head of Asia FX strategy, said in a note.
At last check, the U.S. dollar index, which measures the greenback against a basket of world currencies, was up from opening levels but still below overnight highs. The U.S. dollar looked set for its biggest weekly drop in four on market concerns that U.S. tax reform could be delayed until year after next.
"The potential failure of tax reform in the short-term poses a real risk to the U.S. dollar's steady rally from the September lows," IG's Chris Beauchamp said in a note. "There is, so far, little sign that the administration can break the deadlock, which should see investors continue to shun both the greenback and the overextended stock rally for the time being."
Against other currencies, the U.S. dollar was flat against the yen and down about 0.6 per cent on the week. The euro was also flat against the greenback but slightly higher on the week.
In bonds, Reuters notes that 10-year U.S. yields rose four basis points on Friday to 2.38 per cent but below a seven-month high of 2.48 per cent hit on Oct. 27. The yield on the 30-year note was higher at 2.854 per cent. Consumer sentiment data due at 10 a.m. (ET) was seen as the next data point likely to affect U.S. bond markets.
Stocks set to see action
Suncor Energy Inc. has named Mark Little as chief operating officer, elevating him to the No. 2 job at the oil sands producer, The Globe's Jeff Lewis reports. Calgary-based Suncor said in a release on Thursday the appointment is effective Dec. 1. Mr. Little is currently president of upstream operations at the company, which is led by chief executive officer Steve Williams. Chief operating officer is a newly created role at Suncor.
J.C. Penney shares jumped in the premarket after the retailer posted same-store sales ahead of analysts' forecasts in the latest quarter. The U.S. retailer said comparable sales were up 1.7 per cent. Analysts were looking for an increase of between 0.6 per cent and 0.8 per cent. However, the company also posted a wider net loss of $128-million or 41 cents. Shares were up more than 9 per cent in premarket trading.
Hydro One posted lower third-quarter profit on costs linked to the proposed $6.7-billion acquisition of U.S.-based Avista Corp..Hydro One said profit attributable to common shareholders was $219-million in the three months ended Sept. 30, down from $233-million a year earlier. Excluding costs associated with Avista, Hydro One's adjusted profit rose 2 per cent at $237-million. Earnings per share in the latest quarter totalled 37 cents. Adjusted earnings per share in the period came in at 40 cents.
Equifax Inc. reported a lower third-quarter profit after the close of trading on Thursday as costs from the credit reporting bureau's recently disclosed data breach that exposed deeply sensitive information on 145.5 million people began to mount. Net income attributable to Equifax fell to $96.3-million, or 79 cents per diluted share, from $132.8-million, or $1.09 per diluted share, a year earlier. Adjusted for one-time costs, such as hacking– and merger-related expenses, Equifax said it earned $1.53 per share, beating an average of analysts' estimates by 4 cents, according to Thomson Reuters I/B/E/S. Equifax shares were down 0.9 in premarket trading.
Walt Disney Co. reported after-the-bell earnings that missed Wall Street targets as profit fell at its media networks unit, the movie studio and its consumer products division. Revenue from Disney's cable business, the largest unit which includes ESPN and Disney Channel, fell marginally to $3.95-billion in the fourth quarter, missing the $4.06-billion consensus of analysts polled by Thomson Reuters I/B/E/S. Results at sports channel ESPN were comparable to the prior year, Disney said, but subscribers and advertising revenue declined even as affiliate revenue rose. Disney shares were up 3 per cent in premarket trading, clawing back losses posted in the immediate wake of Thursday's earnings report.
British budget airline easyJet said on Friday its new chief executive officer would be Johan Lundgren, a travel executive who most recently spent 12 years at rival travel firm TUI. Lundgren replaces Carolyn McCall, who has run easyJet since 2010 and is leaving at the end of the year to become CEO of ITV.
Equitable Group Inc. raised its quarterly dividend and reported net income in the third quarter that was 7 per cent higher than a year earlier. The company behind Equitable Bank said its net income was $37.9-million or $2.21 per share versus $35.2-million or $2.16 for the same quarter a year ago. The company declared a dividend of 25 cents per share, starting with the January 2018 payment, which it says it a 14-per-cent increase over the dividend declared in November 2016 and 4.2 -per-cent increase over the dividend declared in August 2017.
Shares of Nvidia were up 4.8 per cent after the chipmaker's revenue forecast for the current quarter topped estimates. Its adjusted profit came in at $1.33 a share, 39 cents above estimates.
Hertz Global Holdings jumped 11.5 per cent as the car rental company reported a better-than-expected net profit.
Nordstrom fell 0.5 per cent after its quarterly same-store sales came in below expectations.
J.C. Penney was up 16.3 per cent after the department store chain reported third-quarter same-store sales that were twice what it had estimated.
Wall Street Journal owner News Corp. reported a better-than-expected quarterly profit on Thursday, driven by a tight control on expenses and growth in revenue across all its businesses. On an adjusted basis, the company earned 7 cents per share, beating the average analysts' estimate of a profit of 1 cent, according to Thomson Reuters I/B/E/S. Total revenue rose 4.5 percent to $2.06 billion, beating analysts' estimate of $1.98 billion. Its shares were up 1.5 per cent in premarket trading.
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Economic News
(10 a.m. ET) U.S. University of Michigan's Consumer Survey for November is unveiled.
With files from Reuters and Bloomberg