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Equities

Canada’s main stock index started higher Friday helped by higher crude prices while heightened tensions between China and the United States weighed on Wall Street in early trading.

At 9:30 a.m. ET (13:30 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 21.36 points, or 0.15%, at 14,531.02.

In the United States, the Dow Jones Industrial Average fell 170.51 points, or 0.72%, at the open to 23,454.83.

The S&P 500 opened lower by 27.40 points, or 0.96%, at 2,825.10. The Nasdaq Composite dropped 103.73 points, or 1.16%, to 8,839.99 at the opening bell.

Ahead of the opening bell, the U.S. Commerce Department said retail sales in April fell a record 16.4 per cent, further weighing on investor sentiment.

“It’s not been the best week for stock markets,” OANDA senior analyst Craig Erlam said. “We’ve had more data that’s very hard to ignore - Germany in recession, worst monthly U.K. contraction on record - [Fed chair Jerome] Powell was less than optimistic about the outlook, tensions between the U.S. and China are rising at a ferocious rate and on top of all that, the threat of a second wave of coronavirus cases is upon us in some countries just as others are starting to emerge from the first.”

Markets got some some support early Friday after China reported that factory output rose for the first time this year. Industrial production advanced 3.9 per cent in April from year-earlier levels. Economists had been expecting an increase of 1.5 per cent after a 1.1-per-cent gain. That indicator, however, was countered by a reading on China’s retail sales, which fell 7.5 per cent in April.

However, positive sentiment was offset by renewed friction between Washington and Beijing.

In an interview broadcast on Thursday, U.S. President Donald Trump said he has no interest in speaking with China’s President Xi Jinping right now because of China’s response to the spread of the novel coronavirus. The heightened tensions come just months after the two sides agreed to the first phase of a new trade deal.

Further complicating the situation were reports Friday that the Trump administration moved to block shipments of semiconductors to Huawei Technologies from global chip makers. The U.S. Commerce Department said it was amending an export rule to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain U.S. software and technology.”

Chip makers Qualcomm Inc, Micron Technology Inc and Texas Instruments Inc. were all down in early trading in New York.

In Canadian corporate news, Aurora Cannabis Inc.'s U.S. listed shares surged more than 40 per cent in morning trading in Toronto after the company reported a smaller loss compared with the prior quarter as customers stockpiled cannabis ahead of the lockdown.

Aurora sold 12,729 kilograms of cannabis in the third quarter, 39 per cent more than a year earlier. The company also said it was on track to be profitable in the next fiscal year. Aurora released its latest results after the close of trading on Thursday.

Overseas, major European markets were off earlier highs. By afternoon, the pan-European STOXX 600 was up 0.45 per cent. Britain’s FTSE 100 gained 0.71 per cent. Germany’s DAX advanced 0.81 per cent while France’s CAC 40 fell 0.03 per cent.

In Asia, Wall Street’s Thursday rally failed to carry over to Asian markets, with most finishing the session mixed. Hong Kong’s Hang Seng slid 0.14 per cent. The Shanghai Composite Index edged down 0.07 per cent. Japan’s Nikkei rose 0.62 per cent.

Commodities

Crude prices rose on signs of increased crude use in China.

The day range on Brent is US$30.94 to US$32.50. The range on West Texas Intermediate is US$27.24 to US$28.75. At the moment, Brent looks set for a weekly gain of about 3 per cent while WTI could see a weekly increase of about 15 per cent, according to Reuters.

Figures released Friday by China’s National Bureau of Statistics showed the country processed a total of 53.85 million tonnes of crude oil last month, equivalent to about 13.1 million barrels per day (bpd). That was up about 11 per cent from March and 0.8 per cent above the level for April 2019.

“The oil market rallied yesterday as there was a change in perception about its demand,” David Madden, market analyst with CMC Markets U.K., said, noting reports earlier in the week showed a decline in U.S. crude stocks and a slightly improved outlook for global demand.

“It would appear that traders are less fearful about oversupply and storage issues.”

Gold prices rose in early going.

Spot gold gained 0.4 per cent to US$1,735.67 per ounce, after touch its highest since April 23 at US$1,737.50. U.S. gold futures rose 0.3 per cent to US$1,746.20.

Currencies

The Canadian dollar was slightly weaker, holding around the 71-US-cent mark.

The day range on the Canadian dollar is 70.87 US cents to 71.33 US cents.

“Major currencies have barely moved overnight as equities hold the gains made into yesterday’s U.S. close.,” Adam Cole, RBC’s chief currency strategist, said.

“Stocks are down marginally for the week as a whole. [Thursday’s] Fed speakers all steered clear of the debate on negative rates, but all suggested a v-shaped recovery was unlikely as stressed the need for fiscal support.”

On Friday morning, Canadian investors got a look at existing home sales in April. The Canadian Real Estate Assocation said sales in April fell 56.8 per cent from a month earlier.

On global markets, the U.S. dollar index, which weighs the greenback against a basket of world currencies, was little changed at 100.23, although set for a 0.4 per cent gain for the week.

Japan’s yen was up 0.1 per cent at 107.09 per U.S. dollar but lower on the week.

Britain’s pound remained under pressure, falling 0.2 per cent to US$1.2207, following the British government again said it won’t extend the Brexit transition deadline beyond December.

More company news

Onex Corp. says it swung to a significant loss in the first quarter as a result of market volatility and economic disruption from the COVID-19 outbreak. The investment management firm says it had a net loss of US$1.1 billion or US$10.34 per diluted share for the quarter ending March 31. The Toronto-based firm says US$985-million of the losses were from its investing segment as the pandemic pushed down markets in March and created a broad net decline in the fair value of its underlying portfolio investments.

German flagship carrier Lufthansa said it would be offering 1,800 round trips a week to more than 130 destinations around the world by the end of June. The group, which includes Swiss International Air Lines and Austrian Airlines, had already announced last week that it would start flying more aircraft in June after the company grounded much of its vast fleet due to the coronavirus pandemic.

Taiwan’s Foxconn posted an almost 90% drop in first-quarter profit on Friday, as the coronavirus pandemic disrupted production and hit demand from Apple Inc and other major clients. The world’s largest contract electronics manufacturer reported net profit of T$2.1 billion (US$70.25-million) for the January-March quarter, falling well short of a Refinitiv consensus estimate of T$8.88 billion drawn from 14 analysts.

Ethiopian Airlines expects a settlement with planemaker Boeing over the 737 MAX plane crash in March last year by end of June, CEO Tewolde Gebremariam told Reuters on Friday. “We have invited Boeing to discuss compensation. It’s compensation for the grounded MAX...there is also compensation for delayed delivery of the MAX that was supposed to come and loss of revenue,” he said. “By the end of June, which is the end of our fiscal year, we should have something...meaning compensation.”

Economic news

The Canadian Real Estate Association says national home sales fell 56.8 per cent in April from a month earlier. Year-over-year activity was down 57.6 per cent.

The U.S. Commerce Department says retail sales sank 16.4 per cent last month, the biggest decline since the U.S. government began tracking the series in 1992.

With Reuters and The Canadian Press

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 3:45pm EDT.

SymbolName% changeLast
MU-Q
Micron Technology
-1.32%117.57
AAPL-Q
Apple Inc
-0.77%171.98
TXN-Q
Texas Instruments
+0.58%173.87
ACB-T
Aurora Cannabis Inc
-7.92%5.93
QCOM-Q
Qualcomm Inc
-0.07%169.01

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