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Equities
Canada’s main stock index dipped at the start of trading Thursday as investors took profits. On Wall Street, indexes also started in the red as weekly jobless claims came in ahead of expectations but still remained at elevated levels.
At 9:32 a.m. E, the Toronto Stock Exchange’s S&P/TSX composite index was down 12.56 points, or 0.08 per cent, at 16,685.41.
The S&P 500 opened lower by 16.10 points, or 0.45 per cent, at 3,564.74 and the Nasdaq Composite dropped 194.55 points, or 1.61 per cent, to 11,861.90 at the opening bell.
The Dow Jones Industrial Average fell 9.80 points, or 0.03 per cent, at the open to 29,090.70.
Early Thursday, the U.S. Labor Department said that initial claims for state unemployment benefits totaled a seasonally adjusted 881,000 for the week ended Aug. 29, compared to 1.011 million in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 950,000 applications in the latest week.
The numbers come a day before the key non-farm payrolls numbers on Friday. On Wednesday, private hiring figures released by payroll processor ADP showed growth, although the gains were well below market expectations.
Canadian employment numbers for August will also be released on Friday.
In this country, Statistics Canada said the trade deficit widened to $2.5-billion in July from $1.6-billion a month earlier. The agency said imports increased 12.7 per cent while exports rose 11.1 per cent.
“The recovery in two-way trade remained in the fast lane during July, as further strength in autos drove further solid gains in imports and exports,” CIBC economist Andrew Grantham said.
“However, even after two strong monthly increases, trade volumes still remain below their February levels, exhibiting a slower rebound than some other areas of the economy. Moreover, signs of a slowing US recovery are a clear concern from an export point of view.”
In Europe, the pan-European STOXX 600 was up 0.70 per cent by afternoon. Britain’s FTSE 100 rose 0.53 per cent. Germany’s DAX gained 0.97 per cent. France’s CAC 40 was up 1.64 per cent.
In Asia, Japan’s Nikkei gained 0.94 per cent. Hong Kong’s Hang Seng lost 0.45 per cent.
Commodities
Crude prices continued the previous session’s declines with demand fears continuing to weigh on sentiment
The day range on Brent so far is US$43.55 to US$44.65. The range on West Texas Intermediate is US$40.77 to US$41.79.
Both benchmarks lost about 2 per cent on Wednesday, with WTI dipping to its weakest level in about four weeks.
“With the U.S. driving season end in sight, suggesting there will be a significant drop off on gasoline demand amid one of the most morose pandemics impelled dormancy in U.S. travel ever,” AxiCorp chief global markets strategist Stephen Innes said.
“So, while peering into the September viewfinders, traders find themselves at the end of the runway on bullish catalysts and are now giving way to what cannot go up eventually goes down trade.”
Figures released this week by the U.S. Energy Information Administration showed that U.S. gasoline demand last week fell to 8.78 million barrels a day, from 9.16 million barrels a week earlier.
Markets, meanwhile, drew some support from Iraq’s denial that it was looking for an exemption from the OPEC+ production cuts during the first quarter of next year, according to Reuters.
In other commodities, gold prices touched their weakest level in a week as the U.S. dollar firmed.
Spot gold was down 0.5 per cent to US$1,933.06 per ounce, after falling to its lowest since Aug. 28 at US$1,926.99 earlier in the session.
U.S. gold futures fell 0.3 per cent to US$1,939.
“The moderately bearish seasonality for gold in September also seems to be dragging gold lower, which is getting compounded by less real money buying interest over the past few weeks,” Mr. Innes said.
Currencies
The Canadian dollar was weaker as crude prices slipped and its U.S. counterpart rose against global currencies.
The day range on the dollar is 76.34 US cents to 76.68 US cents.
“Weaker crude oil prices are the obvious drag on CAD sentiment but the CAD is holding up better than some of its G10 peers,” Shaun Osborne, chief FX strategist with Scotiabank, said.
The morning’s losses continued after Statscan reported that this country’s trade deficit widened to $2.5-billion from $1.6-billion in June.
On world markets, the U.S. dollar extended its gains while the euro pulled back on concerns that the European Central Bank was worried about that currency’s rise.
The dollar was up 0.3 per cent against a basket of currencies at 92.96. The U.S. dollar is now up more than 1 per cent from the 28-month low it hit against a group of currencies on Tuesday.
The euro was last down 0.4 per cent at US$1.1806, having slipped earlier in the session to a one-week low of US$1.1789, according to figures from Reuters.
“To a great extent, the euro rally has been on a speculative wing and a prayer that the EU economy will outpace the U.S. recovery, but that has not been the case with U.S. housing and manufacturing booming,” AxiCorp’s Stephen Innes said.
“But the ECB policy, well at least what some board members are telling the press, looks wholly misaligned to reality.”
More company news
Amazon will create a further 7,000 permanent jobs across the United Kingdom in 2020, taking total new jobs this year to 10,000, it said on Thursday. The U.S. internet giant said the new jobs would be in over 50 sites, including corporate offices and two new fulfilment centres in the north east and central England.
Facebook Inc said on Thursday it would stop accepting new political ads in the week before the U.S. presidential election in November. The world’s biggest social network also said it was creating a label for posts by candidates or campaigns that try to claim victory before the election results are official, and widening the criteria for content to be removed as voter suppression.
Campbell Soup Co beat analysts’ estimates for quarterly sales and forecast a 7% rise in current-quarter sales, benefiting from a surge in demand for Prego pasta sauces and Goldfish crackers from consumers stuck indoors due to the COVID-19 pandemic. The company said on Thursday net sales rose to $2.11-billion in the fourth quarter ended on Aug. 2 from $1.78-billion a year earlier. Analysts on average had expected net sales of $2.08-billion, according to IBES data from Refinitiv.
Economic news
830 a.m. (ET) Canada merchandise trade deficit for July.
830 a.m. (ET) Weekly U.S. jobless claims.
830 a.m. (ET) U.S. goods and services trade deficit.
945 a.m. (ET) U.S. Markit services and composite PMI.
With Reuters and The Canadian Press
Terry Weber