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Canada’s main stock index hit its best level in three months early Wednesday as optimism over reopening economies helped buoy global markets despite continuing civil unrest in the United States. Wall Street’s main index also started the session higher.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 109.88 points, or 0.71 per cent, at 15,504.24.

The Dow Jones Industrial Average rose 164.23 points, or 0.64 per cent, at the open to 25,906.88. The S&P 500 opened higher by 18.08 points, or 0.59 per cent, at 3,098.90, while the Nasdaq Composite gained 43.49 points, or 0.45 per cent, to 9,651.86 at the opening bell.

“Markets are putting the politics to one side and pinning hopes on a quick economic rebound once lockdown and travel restrictions are lifted,” Jasper Lawler, head of research with London Capital Group, said.

“The U.S. dollar is falling across the board as riots rage despite big city curfews and haven flows dry up,” he said. “U.S. indices are getting an extra boost from the weaker U.S. dollar which will sure up foreign earnings.”

Wednesday’s gains were underpinned by positive economic news from China, which showed that country’s services sector returned to growth last month for the first time since January as the economy recovers from COVID-19 lockdowns.

The Caixin/Markit services Purchasing Managers’ Index (PMI) rose to 55.0 in April from 44.4 in April, hitting the highest level since late 2010. The 50-mark separates growth from contraction on a monthly basis.

In this country, the Bank of Canada held its key rate unchanged at 0.25 per cent and said it appears that the economic impact from the COVID-19 pandemic has peaked.

On the corporate side, retailer Canada Goose released its latest results, saying it expects negligible revenue in the current quarter amid the fallout from the COVID-19 pandemic.

Overseas, major European markets were higher in afterhoon trading. The pan-European STOXX 600 rose 1.25 per cent. Britain’s FTSE 100 rose 1.15 per cent. Germany’s DAX gained 2.34 per cent. France’s CAC 40 was up 1.99 per cent.

In Asia, Japan’s Nikkei ended up 1.29 per cent. Hong Kong’s Hang Seng rose 1.37 per cent. The Shanghai Composite Index edged up 0.07 per cent.


Crude prices gave up early gains after reports cast doubt on an early OPEC+ meeting this week.

The day range on Brent so far is US$39.65 to US$40.53. The range on West Texas Intermediate is US$36.80 to US$38.18. Both were higher in the predawn period but turned negative after Bloomberg reported that a meeting suggested for Thursday was unlikely unless compliance issues were resolved.

Reuters, citing sources, also reported that Saudi Arabia and Russia had reached a preliminary agreement to extend current production cuts beyond the end of June. However, Reuters also reported that an early meeting this week might not take place.

Meanwhile, sentiment got some support from the latest U.S. inventory figures from the American Petroleum Institute. The industry group said U.S. crude inventories fell by 483,000 in the week to May 29. More official government figures are due from the U.S. Energy Information Administration later on Wednesday morning.

In other commodities, gold prices declined as equities rallied, dampening demand for the safe-haven asset.

Spot gold slid 0.3 per cent to US$1,721.86 per ounce, after declining 0.7 per cent on Tuesday. U.S. gold futures fell 0.4 per cent to US$1,726.90.


The Canadian dollar was trading around 74 US cents after the Bank of Canada held rates steady in its latest policy announcement.

The day range on the loonie so far is 73.69 US cents to 74.18 US cents.

The Bank of Canada kept its key policy rate at 0.25 per cent and said it appears that the economic impact of the COVID-19 pandemic has peaked.

Analysts have suggested the loonie’s recent strength has more to do with a weaker greenback than domestic factors.

“The Canadian dollar rally does not have anything to do with domestic influences,” Rahim Madhavji, president of, said in a note earlier in the week.

“It is all due to broad U.S. dollar sentiment, and that sentiment is bearish. Traders are euphoric about the easing of COVID-19 lockdown restrictions around the world, particularly in the USA. Judging by the scope of equity market gains, and U.S. dollar losses, traders, appear convinced that global economies will rebound.”

On world markets, the U.S. dollar also fell early Wednesday against the euro, the British pound and the Norwegian and Swedish crowns.

The U.S. dollar index, which weighs the greenback against a group of world currencies, fell to near its lowest level in three months at 97.32.

The euro reached an 11-week high of US$1.1125 on expectations policymakers will support the euro zone’s weakest economies with debt purchases, according to Reuters. The euro was last up 0.5 per cent. The seven-day winning streak was the longest since December 2013, the news agency said.

More company news

Canada Goose Holdings Inc said it expected a negligible level of revenue in the current quarter after the luxury parka maker was forced to shut stores in markets across the world due to the COVID-19 pandemic. The company’s revenue fell to $140.9-million in the fourth quarter ended March 29, from $156.2-million a year earlier. The company’s quarterly net income fell to $2.5-million, from $9-million a year earlier.

Zoom Video Communications Inc nearly doubled its expectations for annual sales on Tuesday, driven by a surge in users as more people work from home and connect with friends online during coronavirus lockdowns. The San Jose, California-based company’s revenue and profit also beat estimates by a wide margin in results released after Tuesday’s close. The latest quarterly report shows the company now has about 265,400 customers with more than 10 employees, a near four-fold increase from a year earlier.

Conglomerate 3M Co appointed General Electric Co executive Monish Patolawala as the company’s chief financial officer, effective July 1. Patolawala, who currently serves as the CFO of GE’s healthcare unit, will replace Nick Gangestad, who will retire, the company said.

Warner Music Group, the world’s third-largest recording label, on Wednesday raised US$1.93-billion in an upsized initial public offering, the biggest U.S. listing so far in 2020. The company increased the offering to 77 million class A shares at US$25 per share, from 70 million shares, valuing it at $12.75 billion.

Campbell Soup Co raised its fiscal 2020 adjusted profit and net sales forecast on Wednesday, as demand for its soups, biscuits and snacks surged amid stay-at-home orders to curb the spread of COVID-19. The Prego pasta sauce maker now expects fiscal 2020 adjusted earnings per share to be between US$2.87 and US$2.92 from a prior range of US$2.55 to US$2.60.

AMC Entertainment Holdings Inc signaled “substantial doubts” about its ability to continue operating, if the company was forced to keep its theaters closed for a longer period because of the COVID-19 pandemic. Movie theaters worldwide have been shut since mid-March to help contain the spread of the novel coronavirus. In the United States, individual states are now considering when to allow businesses to reopen. “We cannot predict when or if our business will return to normal levels,” the world’s largest movie theater operator said in a regulatory filing.

Economic news

U.S. private payrolls fell less than expected in May, with employers laying off another 2.76 million workers, payroll processor ADP said. The drop in private payrolls last month came after a record 19.557 million decline in April. Economists polled by Reuters had forecast private payrolls dropping by 9 million in May.

Statistics Canada says labour productivity of businesses rose 3.4 per cent in the first quarter, as hours worked fell faster than business output. The agency said, following measures taken in March to stop the spread of COVID-19, output and hours worked both fell sharply in the three-month period. However, hours worked fell more sharply than business output, resulting in a strong overall productivity increase.

(945 a.m.) U.S. U.S. Markit Serivces/Composite PMI

(10 a.m. ET) Bank of Canada policy announcement on a day Tiff Macklem becomes governor.

(10 a.m. ET) U.S. factory orders for April.

With Reuters and The Canadian Press

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