Canada’s main stock index gained at Monday’s open with gains in energy and materials stock buoying sentiment. On Wall Street, key indexes were also higher as traders look ahead to key economic reports later in the week.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 88.65 points, or 0.45 per cent, at 19,924.4.
The Dow Jones Industrial Average rose 94.74 points, or 0.28 per cent, at the open to 34,441.64.
In the U.S., the S&P 500 opened higher by 20.32 points, or 0.46 per cent, at 4,426.03, while the Nasdaq Composite gained 104.71 points, or 0.77 per cent, to 13,695.36 at the opening bell.
“Now that we heard from Fed Chair [Jerome] Powell at the Kansas City Fed’s Jackson Hole Symposium, the focus shifts back to the data,” OANDA senior analyst Craig Erlam said.
“This week is filled with data that will outline how quickly the economy is weakening.”
This week, Canadian investors will get more earnings from the country’s biggest banks through the week. Bank of Montreal and Bank of Nova Scotia report Tuesday morning, followed by National Bank on Wednesday. CIBC and Laurentian post quarterly results on Thursday. Last week, RBC and TD painted a mixed picture with RBC topping forecasts but also saying it expects to trim its workforce, while Toronto-Dominion Bank fell short of forecasts.
On Friday, Canadian investors will get June and second-quarter GDP figures, with economists expecting to see a sharp slowdown in growth.
RBC economists Nathan Janzen and Claire Fan said the economy continued to grow through April and May but at a slower pace and Statistics Canada is forecasting a contraction of 0.2 per cent in June. The weak end to the quarter suggests an annual growth rate of about 1 per cent in the second quarter, slightly below the Bank of Canada’s estimate for a 1.5-per-cent increase for the three-month period.
“Policy makers clearly are willing to respond with additional interest rate hikes if momentum in the economy isn’t softening enough to ensure inflation pressures will trend lower. But we expect there will be enough signs of cooling demand to-date for the BoC to forego another increase in the overnight rate in September,” they said in a note.
The Bank of Canada’s next interest rate decision is scheduled for Sept. 6.
South of the border, key jobs numbers are due Friday, with a pullback in hiring expected. Economists are looking for an increase of about 170,000 jobs with the jobless rate steady at 3.5 per cent. Last week, Mr. Powell suggested that the Fed would take a “careful” approach to rates in coming months, although he also indicated that the central bank could raise borrowing costs further if necessary to contain inflation. Markets are now expecting U.S. rates to remain unchanged in September, but have priced in a more than 50-per-cent chance of another increase by year’s end.
Overseas, the pan-European STOXX rose 0.69 per cent by midday. Germany’s DAX advanced 0.69 per cent. France’s CAC 40 was up 0.94 per cent. Markets in Britain were closed.
In Asia, Japan’s Nikkei jumped 1.73 per cent. Hong Kong’s Hang Seng added 0.97 per cent.
Crude prices firmed after China announced further measures aimed at supporting the economy and stabilizing markets.
The day range on Brent was US$84.30 to US$84.98 in the early premarket period. The range on West Texas Intermediate was US$79.70 to US$80.42.
“Recent shifts in the supply landscape underscore a less optimistic perspective on the trajectory of crude oil prices,” Stephen Innes, managing partner with SPI Asset Management, said.
“Despite certain positive aspects, significant challenges and uncertainties persist.”
Prices drew some support from the latest efforts out of China to bolster markets.
China announced this weekend that it would halve the stamp duty on stock trading in an effort to boost markets and followed steps to support housing, Reuters reported. China’s securities regulator also approved the launch of 37 retail funds.
In other commodities, gold prices were steady. Spot gold was essentially flat at US$1,914.99 per ounce early Monday morning.
U.S. gold futures gained 0.1 per cent to US$1,942.40.
The Canadian dollar was fairly steady in early trading while its U.S. counterpart pulled back from recent 12-week highs against a group of currencies.
The day range on the loonie was 73.47 US cents to 73.63 US cents in the predawn period. The Canadian dollar is down about 3 per cent against its U.S. counterpart over the past month.
There were no major Canadian economic reports due Monday.
On world markets, the U.S. dollar index, which weighs the U.S. currency against six peers, edged 0.06 per cent lower at 104.11, after hitting its highest since early June on Friday, according to figures from Reuters.
The index is up more than 2 per cent in August and is tracking to end a two-month losing streak.
The euro, meanwhile, the euro, was up 0.14 per cent early Monday to US$1.0809. The euro is down about 1.7 per cent against the U.S. dollar so far in August.
In bonds, the yield on the U.S. 10-year note was down slightly at 4.224 per cent. Last week, 10-year yields hit their highest level since late 2007.
More company news
China Evergrande Group lost as much as US$2-billion, or 80 per cent of its market value, on Monday after its shares resumed trading in a crucial step for the world’s most indebted property firm as it seeks to restructure its offshore debt. Evergrande is at the center of a crisis in China’s property sector that has seen a string of debt defaults since late 2021, and its stock has been suspended for 17 months. The developer is in the process of getting approvals from creditors and the courts to implement the debt restructuring plan. The company said the voting record time will be extended to Sept 20, from Aug 23. -Reuters
Workers at a trio of major automakers have voted overwhelmingly in favour of allowing their union to call a strike if bargaining committees can’t secure new collective agreements in the coming months. Unifor, Canada’s largest private-sector union, says its members at Ford Motor Company, General Motors and Stellantis all voted between 98 and 99 per cent in favour of the strike mandate. The vote took place over the weekend amid a pause in bargaining talks. The current batch of collective agreements, which cover 18,000 workers at the “Detroit Three” automakers, are set to expire before midnight on Sept. 18. -The Canadian Press
UK markets closed
(10:30 a.m. ET) U.S. Dallas Fed Manufacturing Activity for August.
With Reuters and The Canadian Press