Equity Markets
North American markets opened mixed as investors were wary of making big bets ahead of major political and economic events expected on Thursday.
A surprisingly closely-fought British election set for Thursday is weighing on investors' minds along with Senate testimony from James Comey, the former FBI chief fired by President Donald Trump. The European Central Bank's policy meeting is also in focus and affected investor sentiment.
The Canadian stock market opened lower Wednesday as materials and energy shares retreated as prices for gold slipped under pressure from a strengthening dollar, and oil traded lower on worries over growing U.S. output. The S&P/TSX composite index was down 5.73 points, or 0.04 per cent, at 15,458.83. Seven of 10 stock groups were down.
U.S. stocks opened slightly higher on Wednesday but gains were limited as investors stayed away from making big bets ahead of major political and economic events expected on Thursday.
The Dow Jones Industrial Average rose 36.45 points, or 0.17 per cent, to 21,172.68. The S&P 500 gained 3.26 points, or 0.16 per cent, to 2,433.31. The Nasdaq Composite added 20.93 points, or 0.33 per cent, to 6,295.99.
Any damaging revelations in Comey's testimony are likely to further hurt Trump and take the wind out of his plans to roll back regulations and overhaul the tax system – an agenda that had sent the dollar to 14-year highs earlier this year.
The ECB will also hold its policy meeting on Thursday and is expected to reiterate its plan to extend the money-printing scheme at least until the end of the year.
"Tomorrow's what is being dubbed as 'Triple Threat Thursday', ... an event-filled day that could send global markets on a bumpy ride," said ING currency strategist Viraj Patel.told Reuters last week.
The smoothly executed rescue of Spain's struggling Banco Popular prodded European banking stocks higher in financial markets dominated by caution ahead of a trio of major events on Thursday.
Spain's biggest bank Santander is to buy struggling rival Banco Popular for a nominal one euro after European authorities determined the lender was on the verge of insolvency.
Santander will ask investors for around €7-billion of fresh capital to cover the cost of bolstering Popular, which has been weighed down by billions of euros of risky property loans.
Britain's FTSE 100 index slipped 0.25 per cent, Germany's DAX rose 0.23 per cent, and France's CAC rose 0.89 per cent.
In Asia, Hong Kong stocks ended lower after hitting a fresh 23-month intraday high, with more listed companies in the city targetted by short-sellers.
The Hang Seng index fell 0.1 per cent, to 25,974.16. The Nikkei rose 0.02 per cent and the Shanghai index added 1.24 per cent.
Commodities
Gold steadied near seven-month highs on Wednesday with sentiment still bullish due to a lower dollar and political uncertainty created by an election in Britain and a testimony by a former FBI director to the U.S. Senate.
Spot gold was down 0.1 percent at $1,292.55 an ounce. On Tuesday, it gained 1.1 percent to hit its highest level since November last year at $1,295.97. U.S. gold futures slipped 0.2 percent to $1,294.2.
"Gold is being driven by a weaker dollar, U.S. politics and the U.K. election," said SP Angel analyst John Meyer.
The yellow metal has gained nearly 7 per cent in the past month.
Oil prices dipped on Wednesday on renewed concerns about the efficacy of OPEC-led production cuts due to rising tensions within the export group over Qatar and growing U.S. output.
Brent crude prices were at $49.79 per barrel, down 33 cents. Brent is about 8 per cent below its open on May 25, when OPEC and other producers agreed to extend oil output cuts through to the first quarter of 2018.
West Texas Intermediate (WTI) crude futures were at $48.12 per barrel, down 0.1 per cent.
Currencies and bonds
The Canadian dollar slipped Wednesday as oil prices faltered. The loonie strengthened on Tuesday to a nearly one-week high against its U.S. counterpart as oil prices rose, but the range was narrow ahead of key events later in the week. The Canadian 10-year bond yield slipped.
The U.S. dollar fell to a more than six-week low against the yen on Tuesday, dipping below a key technical level as treasury yields slipped on heightened caution ahead of a trio of events on Thursday.
U.S. Treasury yields fell as investors piled into low-risk bonds on worries linked to Britain's general election, the European Central Bank's policy meeting and former FBI Director James Comey's testimony before a Senate panel, all scheduled for Thursday.
The dollar was down 0.91 per cent against the yen at 109.45, having broken below its 200-day moving average to touch 109.29 yen, its lowest since April 21.
Stocks set to see action
Guelph, Ont.-based Canadian Solar Inc. is facing the threat of American trade action against its Asian manufacturing operations as the global solar-energy industry struggles with tough competition and plummeting costs.
Canadian dollar-store operator Dollarama Inc. reported a 13.9 per cent increase in quarterly profit on Wednesday as customers on average spent more at its stores. The Montreal-based company's net income rose to $94.7-million or 82 cents per share in the first quarter ended April 30, from $83.2-million or 68 cents per share, a year earlier. Sales climbed 10 per cent to $704.9-million.
Marijuana financier Cannabis Wheaton Income Corp. hired a new investment dealer Tuesday to raise $50-million for the company, resurrecting a much-watched deal that features the company's lawyer and former bankers as significant personal shareholders.
Royal Dutch Shell PLC has largely exited the oil sands but remains committed to Canada through other operations, including shale development in Alberta and B.C. – where a $1-billion investment was made in 2016 and another $1-billion is coming this year – the multinational energy firm's Canadian president, Michael Crothers, says.
Shares of Navistar International were down 8.5 per cent in premarket trading after the truck and engine maker posted a quarterly loss.
Tesla slipped 0.8 per cent after the company's annual shareholder meeting on Tuesday.
Exact Sciences was down 2.2 per cent after the diagnostics test maker looks to raise $250-million in a stock deal.
BMO Capital downgraded both Coca-Cola and PepsiCo to "market perform" from "outperform." Coca-Cola's shares fell 0.83 per cent in premarket trading, while PepsiCo stock was off 0.72 per cent.
Keysight was up 6.8 per cent after the electronic measurement equipment maker's forecast topped expectations.
Dave & Buster's restaurant chain fell 1.9 per cent in premarket trading after the company beat estimated by 6 cents with an adjusted quarterly profit of 87 cents per share. Revenue also beat forecasts but same store sales fell short.
U.S. drugmaker AbbVie Inc. said on Wednesday late-stage data showed its rheumatoid arthritis drug performed better than a placebo in reducing symptoms in moderate-to-severe patients who have not adequately responded to standard treatments. It shares rose 0.8 per cent in premarket trading.
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Economic News
(8:30 a.m. ET) Canada building permits for April. Estimate is an increase of 3 per cent from March.
(10:30 a.m. ET) EIA Petroleum Status report.
(3 p.m. ET) U.S. consumer credit for April. Consensus is an increase of $15-billion from March.
With files from Reuters and Bloomberg