Equity Markets
U.S. stock markets reopen Friday for a shortened session after the Thanksgiving holiday. Economic data and Black Friday-mania will likely be the main focus with futures pointing to a positive start to the final trading day of the week. On Bay Street, futures were in positive territory as oil prices pushed higher.
The U.S. markets will close at 1 p.m. and Black Friday will be drawing attention in retailers.
"Nearly 70 per cent of Americans are expected to hit the online or traditional shops over the weekend," LCG senior market analyst Ipek Ozkardeskaya said. "The pre-sales data indicate a better performance compared to last year; early numbers point at a solid 18-per-cent year-on-year increase in November sales so far. U.S. households' holiday spending could increase as much as 4% compared with last year, according to Bloomberg news."
Shares of retailers like Amazon, Macy's and Wal-Mart were higher in premarket trading. Best Buy and J.C. Penney shares were also up.
On the data side, U.S. investors get the Markit Flash composite purchasing managers index just after the markets open. Consensus forecasts range from 55.1 to 55.5 down from the previous month's reading of 55.7. The index offers an early estimate of private sector output.
On this side of the border, Empire Co. Ltd. shares will be in the spotlight. The Globe's Marina Strauss reports this morning that grocer Sobeys Inc., owned by Empire, is laying off more than 800 of its employees - nearly 20 per cent of its office staff nationally - in a bid to cut costs and prepare for a more digital future. Empire shares finished Thursday at 24.66 and have a 52-week range of $14.74 to $25.43.
Overseas, world stocks held just below record levels and looked set to book the first weekly gain in three as the euro manages its best level against the U.S. dollar in six weeks.
The MSCI World Index, which tracks shares in 47 countries, was higher early on and looked set to finish the week up 1 per cent. Forecast-beating economic reports released Thursday showing gains in the services and factory sectors in Europe helped underscore the gains.
In Europe, markets were narrowly mixed with bank stocks showing strength on reports that two European banking directors were being readied in Brussels to bring forward looser rules around bad loan disposals.
Brtain's FTSE 100 was down 0.12 per cent. German's DAX advanced 0.28 per cent and France's CAC 40 was 0.60 per cent higher.
In Asia, markets finished mixed. The previous session's selloff in Chinese shares on new liquidity rules eased as the week came to a close. The Shanghai composite index - which lost more than 2 per cent on Thursday - ended Friday up 0.06 per cent. Hong Kong's Hang Seng finished up 0.53 per cent. Meanwhile, Japan's Nikkei reversed early losses in the session to finish up 0.12 per cent at 22,550.85.
Commodities
Oil prices were higher in early going with the partial closure of the Keystone line putting upward pressure on U.S. crude prices. Ahead of the North American opening bell, West Texas Intermediate was up and trading in a day range of $58.36 to $58.71. In the overnight period WTI hit its highest level since July 2015. Benchmark Brent was also trading higher after spending much of the Asian session underwater. The day range on Brent so far is $63.32 to $63.75.
Traders said much of the U.S. crude price increase has been the result of a reduction of the usual 590,000 barrels a day flow to U.S. refineries on the Keystone line following a Nov. 16 spill in South Dakota. The reduction has cut into inventories at the storage hub of Cushing, Oklahoma, they said.
As well, markets are awaiting next week's OPEC meeting when members and non-member producers are expected to extend their current production cut beyond March. However, analysts caution that prices could suffer even if the extension is delivered because the news is already priced into the market.
"OPEC is expected to extend the supply cut agreement beyond March 2018 deadline, an extension to September looks like a plausible decision," Ms. Ozkardeskaya said. "Yet this is already fully priced in and traders should be ready for any pullback in prices if there are no significant adjustments on the quantities. Given the high level of market expectations, OPEC has little room to surprise at next week's meeting."
In other commodities, gold prices were lower early Friday as investors took profits. Spot gold and gold futures for December deliver were both lower early on, although some traders say they expect to see the metal move back to $1,300 next week on U.S. dollar weakness.
Silver prices were also down slightly and looked set to finish the week off more than 1 per cent. It would be the first weekly decline in three for that metal. London copper was higher on U.S. dollar weakness.
Currencies and bonds
The Canadian dollar was little changed against its U.S. counterpart, trading near the mid-78-cent (U.S.) mark. The day range on the loonie so far is 78.45 cents to 78.68 cents. The U.S. dollar has suffered since midweek when the U.S. Federal Reserve minutes suggested policy markers are still worried about low inflation causing some analysts to question the pace of rate hikes next year. A December U.S. rate increase in almost fully priced in by the markets.
"The U.S. dollar continued to slip back after Wednesday's minutes hitting two month lows against the Japanese yen and one month lows against a the euro and sterling, as uncertainty about U.S. rate policy in 2018 continued to undermine the currency against the backdrop of a flattening yield curve," CMC chief market analyst Michael Hewson said in a note.
The U.S. dollar touched its lowest level in five weeks against a basket of world currencies early Friday. Trading has been thin due to the U.S. market holiday on Thursday. Markets in Japan were also closed Thursday for a public holiday.
In other currencies, the euro managed a six-week high against the greenback after economic data earlier in the week underpinned strength in the euro zone recovery. The euro had started the week down on news that efforts to form a coalition government in Germany failed, although it quickly regained its footing in the markets. On Thursday, minutes from the European Central Bank's latest meeting showed policy makers had broadly agreed on extending quantitative easing, although at lower levels.
In bonds, U.S. Treasurys were lower as investors awaited fresh economic data after the start of trading. The yield on the 10-year note was higher at 2.347 per cent. The yield on the 30-year note was also higher at 2.772 per cent.
Stocks set to see action
Empire-owned grocery chain Sobeys Inc. is laying off more than 800 of its employees – almost 20 per cent of its office staff across the country – in its efforts to cut costs and turn around its struggling operations while preparing for a more digital future.
Aurora Cannabis Inc. says it's buying H2 Biopharma Inc., based in Lachute, Que. for $25-million. It said the price will be "satisfied through the issuance of Aurora common shares." Aurora said it will make an initial payment of $10-million and further payments based on performance-related milestones, including completion of a cannabis-production facility the company is building.
A possible accord between Italian broadcaster Mediaset and French media group Vivendi to settle their dispute over a soured pay-TV deal is not imminent, Mediaset's chief financial officer told Reuters on Friday. The two companies have been at loggerheads since Vivendi backtracked last year on a deal to buy Mediaset's pay-TV unit Premium. "There is nothing yet and the negotiations are pretty lukewarm," Marco Giordani told Reuters. "The lawyers are talking but nothing arrived at board level yet." Asked whether a deal could be struck by Dec. 19, when a court hearing is scheduled on the matter, Giordani said he did not know, but reiterated nothing "was getting warm".
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Economic News
U.S. PMI Composite Flash index (9:45 a.m. ET)
With files from Reuters and Bloomberg