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Equities
Canada’s main stock index started higher Wednesday with energy shares getting a lift from climbing crude prices. South of the border, Wall Street’s major indexes also opened up with gains by tech companies helping offset mixed bank results.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 41.03 points, or 0.25 per cent, at 16,551.86.
The Dow Jones Industrial Average rose 51.49 points, or 0.18 per cent, at the open to 28,731.30.
The S&P 500 opened higher by 3.54 points, or 0.10 per cent, at 3,515.47 and the Nasdaq Composite gained 25.18 points, or 0.21%, to 11,889.07 at the opening bell.
Ahead of the start of trading, Wall Street investors got another round of U.S. bank earning after JPMorgan and Citigroup both topped estimates with their latest results on Tuesday. Goldman Sachs and Bank of America both reported their quarterly earnings ahead of Wednesday’s open.
Goldman Sachs Group Inc reported a 94-per-cent increase in quarterly profit. The bank’s net earnings applicable to common shareholders surged to US$3.5-billion in the quarter ended Sept. 30 from US$1.8-billion a year ago. Earnings per share doubled to US$9.68 from US$4.79 a year earlier.
Bank of America reported a 15.8-per-cent decline in profit on higher provisions for credit losses. Net income applicable to common shareholders fell to US$4.44-billion, or 51 US cents per share, in the quarter ended Sept. 30, from US$5.27-billion, or 56 US cents per share, a year earlier.
Shares of Apple Inc. were up more than 1 per cent in morning trading after the tech giant unveiled its new 5G-capable iPhones that promise faster speeds and less lag time. The Globe’s Alexandra Posadzki reports that Canada’s wireless carriers are hoping to see a boost from the launch but say it will be some time before their customers are able to experience the full potential of next-generation technology.
On Bay Street, investors will get results from retailer Aritzia Inc. after the close of trading.
Shortly after the start of trading, Bank of Canada deputy governor Timothy Lane will be participating in a panel discussion on the subject of central bank digital currency and the private sector.
Overseas, the pan-European STOXX 600 struggled to hold early gains, sliding 0.08 per cent by afternoon. Britain’s FTSE 100 fell 0.25 per cent. Germany’s DAX and France’s CAC 40 fell 0.14 per cent and 0.21 per cent.
In Asia, Japan’s Nikkei closed up 0.11 per cent despite a weak handoff from Wall Street. Hong Kong’s Hang Seng edged up 0.07 per cent. The Shanghai Composite Index lost 0.56 per cent.
Commodities
Crude prices rebounded after the International Energy Agency said global oil inventories are being steadily reduced but also cautioned that a second wave of coronavirus infections will complicate efforts to balance the market.
The day range on Brent is US$42.13 to US$42.64. The range on West Texas Intermediate is US$39.86 to US$40.36.
In a new report released early Wednesday, the IEA said efforts by producers to shore up the market have shown “some success.” It said stable prices and a strong draw on storage implied global stocks falling by 2.3 million bpd in the third quarter and by a predicted 4.1 million bpd in the fourth, according to Reuters.
Still, the agency also said the rebound seen over the summer was slowing due to a second wave or COVID-19 cases and related restrictions reintroduced by governments.
Meanwhile, OPEC said in its monthly report on Tuesday that oil demand in 2021 will rise by 6.54 million barrels per day to 96.84 million bpd, 80,000 bpd less than its forecast a month ago as a result of the impact of rising infections in some regions of the world.
“The overnight recovery in prices has understandably given way to concerns about the economic implications of a rise in COVID-19 cases throughout the major western economies,” Axi chief global market strategist Stephen Innes said.
“More so as it pertains to what means lawmakers deal with this surge and how consumers relate the wild card. But with most of the recent uptick on COVID baked in the cake, I expect the bids to remain faithful to the OPEC compliance narrative.”
Later in the session, investors will get the first of two weekly U.S. inventory reports when the American Petroleum Institute releases its latest figures. The U.S. Energy Information Administration is set to release its weekly report on Thursday. Both have been delayed a day because of the Columbus day holiday in the United States on Monday.
In other commodities, gold prices firmed amid economic uncertainties brought on by the resurgence in coronavirus infections.
Spot gold rose 0.2 per cent to US$1,895.16 per ounce, after falling as much as 1.9 per cent on Tuesday. U.S. gold futures gained 0.2 per cent to US$1,897.30.
Currencies
The Canadian dollar held steady while its U.S. counterpart added to recent gains as investors turned cautious amid rising coronavirus infections and delays in vaccine trials.
The day range on the loonie is 76.01 US cents to 76.24 US cents.
There were no major Canadian economic releases on Wednesday’s calendar.
“We look for more range trading in the short run but we also rather think the CAD’s recent improvement against the USD is looking somewhat stretched,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“Crude oil prices are modestly lower on the day, with WTI settling around the $40 level; the broader commodity complex looks mixed.”
Early Wednesday, the U.S. dollar index, which weighs the greenback against a basket of currencies, was up 0.1 per cent, extending the previous session’s high of 93.599.
Britain’s pound fell 0.3 per cent against both U.S. dollar and euro as investors became less hopeful a Brexit will be reached. European Union leaders meeting on Thursday and Friday will say that there is still not enough progress in negotiations to seal a trade deal, according to a Reuters report.
The euro slid 0.1 per cent against the U.S. dollar at US$1.17365, having hit a new one-week low earlier in the session,
The Australian dollar was flat on the day at 71.58 US cents. The New Zealand dollar was little changed at 66.47 US cents, according to figures from Reuters.
More company news
Wells Fargo & Co reported a 57-per-cent drop in third-quarter profit on Wednesday as the bank’s loan book shrank and near-zero interest rates and higher costs hurt its bottom line. The bank reported net income applicable to common stock of US$1.72-billion, or 42 US cents per share, for the quarter ended Sept. 30, compared with US$4.04-billion, or 92 US cents per share a year earlier.
Walmart Inc will extend its Black Friday deals beyond the usual one day period this year, the world’s largest retailer said on Wednesday, as the COVID-19 pandemic forces consumers to significantly change their spending habits. The revamped promotion will offer Walmart shoppers reduced prices during three separate savings events across November, the company said. Each savings event will begin online at Walmart.com and continue in Walmart stores.
U.S. oil producer ConocoPhillips is in talks to acquire shale producer Concho Resources Inc , Bloomberg News reported on Tuesday, citing people familiar with the matter. The companies may announce a deal in a few weeks, the report said, adding that no final decision has been made and talks could fall through.
Macy’s Inc said on Wednesday Adrian Mitchell, a managing director at Boston Consulting Group, will take over as the department store operator’s chief financial officer in November. Paula Price stepped down as Macy’s CFO in May and was replaced on an interim basis by Felicia Williams.
Economic news
(8:30 a.m. ET) U.S. PPI Final Demand for September.
With Reuters and The Canadian Press
Terry Weber