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Equities

Canada’s main stock index edged higher at Thursday’s open with gains by Rogers Communications Inc. on better-than-expected earnings helping offset weakness in materials stock. Wall Street’s main indexes also managed modest gains in early trading as investors continued to hold out hope that stimulus talks would yield fresh coronavirus relief.

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At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 6.12 points, or 0.04 per cent, at 16,224.11.

In the U.S., the S&P 500 opened higher by 2.94 points, or 0.09 per cent, at 3,438.50, while the Nasdaq Composite gained 42.28 points, or 0.37 per cent, to 11,526.98 at the opening bell.

The Dow Jones Industrial Average fell 13.40 points, or 0.05 per cent, at the open to 28,197.42.

Futures tied to all three major U.S. indexes were in the red ahead of the North American open, although off earlier lows. On Wednesday, the Dow, S&P and Nasdaq all finished lower. The S&P/TSX Composite Index ended down 0.26 per cent after a volatile session.

“As far as a U.S. stimulus package is concerned the penny appears to be finally dropping that there is unlikely to be a plan that will be able to get past the Republicans in the U.S. Senate, even if [House speaker] Nancy Pelosi and [Treasury Secretary] Steve Mnuchin were able to put something down on paper, in their various short phone calls over the past few days.” CMC chief market analyst Michael Hewson said, noting Senate Republicans want a much smaller relief bill than that favoured by Democrats.

On Wednesday, Ms. Pelosi and White House officials indicated that they continue to narrow differences on a bill to provide fresh coronavirus relief. But U.S. President Donald Trump cast doubt on the talks, tweeting that he didn’t see any way the Democrats would “do what is right” on stimulus.

On the corporate side, shares of Tesla were up more than 2 per cent in early trading after the company reported its fifth straight quarterly profit.

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Tesla said after the close on Wednesday that it made US$331-million, or 27 US cents per share in the most recent quarter. Excluding special items, Tesla made 76 US cents per share, beating Wall Street estimates of 57 US cents. Revenue from July through September was US$8.77-billion, a record that passed analysts' expectations of US$6.3-billion, according to FactSet.

After the closing bell, chip maker Intel Corp. reports earnings.

On Bay Street, Rogers Communications revenue topped market forecasts in the latest quarter. The company reported revenue of $3.67-billion for the period, down from $3.75-billion a year earlier. Analysts on average had expected revenue of $3.34-billion in the most recent quarter, according to IBES data from Refinitiv.

Rogers shares jumped 8 per cent shortly after the opening bell in Toronto.

The earnings come amid an $11.1-billion hostile bid by Rogers and New York-based cable company Altice USA Inc. for Cogeco Communications and its parent company Cogeco Inc. The unsolicited offer has been rejected by the boards of the Cogeco companies and their controlling shareholders, the Audet family. On Wednesday, Cogeco Communications struck a deal to buy Quebec-based cable company DERYtelecom for $405-million.

Before the North American open, U.S. investors also got a better-than-expected reading on weekly jobless claims. The U.S. Labor Department said initial claims for state unemployment benefits totalled 787,000, better than the 875,000 economists had been expecting.

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“Broadly speaking, does this reflect a stronger job market? Sure .... nonfarm payrolls are rising, although the rate has slowed,” Bank of Montreal senior economist Jennifer Lee said.

“But does this also reflect the expiration of the jobless benefits? Sure ... the number of Americans on the Pandemic Emergency Unemployment Compensation program (or PEUC for short), rose 509,823 in the week to October 3 to 3,296,156.”

Overseas, Europe’s major markets opened lower but firmed as the session continued. By afternoon, the pan-European STOXX 600 was up 0.09 per cent. Britain’s FTSE rose 0.20 per cent. Germany’s DAX and France’s CAC 40 were up 0.12 per cent and 0.30 per cent, respectively.

Sentiment took an early hit after the GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, fell to -3.1 heading into November from a revised -1.7 in the previous month. The reading fell short of a Reuters forecast for a narrower drop to -2.8.

Germany’s DAX fell 0.75 per cent. France’s CAC 40 lost 0.64 per cent. Britain’s FTSE 100 was off 0.33 per cent.

In Asia, Japan’s Nikkei finished down 0.70 per cent. Hong Kong’s Hang Seng edged up 0.13 per cent.

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Commodities

Crude prices remained under pressure after the latest U.S. inventory figures showed a surprise increase in refined products, raising concerns about demand.

The day range on Brent is US$41.46 to US$42.16. The range on West Texas Intermediate is US$39.71 to US$40.41. Both fell about 3 per cent on Wednesday.

The U.S. Energy Information Administration’s latest weekly report showed that U.S. gasoline stocks rose by 1.9 million barrels last week. Markets had been expecting a decline of 1.8 million barrels.

Overall product supplied, a proxy for demand, averaged 18.3 million barrels per day in the four weeks to Oct. 16, the EIA said - down 13 per cent from the same period a year earlier, according to Reuters.

“That view then fuses with the sum of all fears that COVID-19 is again starting to impact consumer behaviour at the pump negatively,” Axi chief market strategist Stephen Innes said.

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“Mobility data had been holding up in the U.S., but this hard evidence paints an even uglier picture than expected, mostly when seen through the lens of growing Cushing warehouses.”

In other commodities, gold prices were lower as the U.S. dollar recovered some lost ground on growing doubts about a U.S. stimulus package.

Spot gold fell 0.3 per cent to US$1,919.65 per ounce, after hitting more than a one-week high on Wednesday. U.S. gold futures slipped 0.3 per cent to US$1,923.00.

“Without stimulus, there’s a lot of uncertainty and that’s driving people to be a bit cautious and move towards the U.S. dollar,” Michael Langford, executive director at corporate advisory and consultancy firm AirGuide, said.

Currencies

The Canadian dollar was down slightly in early going as its U.S. counterpart steadied above seven-week lows against a group of world currencies.

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The day range on the loonie is 75.89 US cents to 76.12 US cents.

There were no major Canadian economic releases on Thursday.

In early London trading, the U.S. dollar index, which weighs the greenback against a basket of world currencies, was slightly lower at 92.612, but above its lowest level since Sept. 2 hit Wednesday.

The U.S. dollar had struggled as optimism over stimulus talks bolstered world markets. However, growing uncertainty in recent days is playing in the greenback’s favour as investors again seek out safer holdings.

“[The] USD is trading with a slight bid tone,” RBC FX strategy associate Daria Parkhomenko said in an early note.

“In the U.S., House Speaker Pelosi’s spokesman tweeted that Pelosi and Treasury Secretary Mnuchin made more progress in the stimulus talks on Wednesday, though Pelosi suggested earlier in the day that a fiscal package may not pass until after the elections.”

She also noted that the Federal Reserve’s Beige Book, which was released Wednesday afternoon, said the pace of the U.S. economic recovery remains “slight to modest” in most regions of the country.

The euro edged down 0.16 per cent to US$1.18420, slipping from one-month highs of US$1.18805 hit on Wednesday, according to figures from Reuters.

Japan’s yen drifted away from Wednesday’s four-week high of 104.345, last sitting at 104.74 against the U.S. dollar. Britain’s pound was last trading at US$1.3145, little changed on the day.

More company news

Calgary-based Precision Drilling Corp. says it lost $28.5-million in its latest quarter as revenue fell 56 per cent compared with a year ago. The oilfield services company says the loss amounted to 10 cents per diluted share for the quarter ended Sept. 30. The result compared with a loss of $3.5-million or a penny per diluted share in the same quarter a year ago.

Corus Entertainment Inc. reported its fourth-quarter profit rose compared with a year ago. The company, which includes Global Television, says it earned $30.3-million in net income attributable to shareholders or 15 cents per diluted share for the quarter ended Aug. 31. That compared with a profit of $22.9-million or 11 cents per diluted share a year ago. Revenue totalled $318.4-million, down from $377.5-million.

Unilever reported a stronger-than-expected return to sales growth in the third quarter on Thursday led by emerging markets where it generates the bulk of its revenue. Underlying sales rose 4.4 per cent, for the Anglo-Dutch maker of Dove soap, Hellmann’s mayonnaise and Tresemme shampoo. Analysts on average were expecting an increase of 1.3 per cent, according to a company-supplied consensus.

The Globe’s Susan Krashinsky Robertson reports coffee-and-doughnuts chain Tim Hortons is preparing to test a system that would give customers the option to pay a deposit to have orders filled in reusable cups and other packaging and to return those items at its cafés and other drop-off points. Toronto-based Restaurant Brands International Inc. will begin the test at some of its Tim Hortons locations in the Greater Toronto Area later next year, and will also conduct a similar test in its Burger King restaurants outside of Canada.

AT&T Inc reported the coronavirus pandemic had taken a heavy toll on its media business, but quarterly results were offset by stronger than expected gains in new phone subscribers lifted by offers for its HBO Max streaming service for free on certain phone plans. That helped AT&T beat revenue expectations. Total revenue was $42.3-billion during the third quarter ended Sept. 30, exceeding the average analyst expectation of $41.59-billion, according to IBES data from Refinitiv.

Coca-Cola Co beat quarterly revenue expectations as the world’s largest soda maker benefited from the partial reopening of theaters and restaurants, which have remained shut for months due to the COVID-19 pandemic. Net revenue fell 9% to $8.7-billion in the third quarter, above the analysts' average estimate of $8.36-billion, according to IBES data from Refinitiv.

Southwest Airlines Co reported a loss of more than $1-billion, its biggest ever, in the third quarter, while saying it would burn less cash in the months to come as leisure bookings show signs of recovery from this year’s coronavirus-driven collapse. Southwest, which is blocking middles seats for social distancing through November, said it would resume selling all available seats for travel from Dec. 1.

Economic news

(8:30 a.m. ET) U.S. existing jobless claims for week of Oct. 17.

(10 a.m. ET) U.S. existing home sales for September.

(10 a.m. ET) U.S. leading indicators for September.

Also: U.S. presidential debate

With Reuters, The Associated Press and The Canadian Press

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