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Equities

Energy stocks underpinned early gains Friday for Canada’s main stock index while continued optimism over U.S. coronavirus stimulus talks lifted Wall Street indexes and fuelled advances on global markets.

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At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 33.49 points, or 0.21%, at 16,312.85.

In the U.S., the Dow Jones Industrial Average rose 45.99 points, or 0.16 per cent, at the open to 28,409.65.

The S&P 500 opened higher by 11.41 points, or 0.33 per cent, at 3,464.90, while the Nasdaq Composite gained 30.00 points, or 0.26 per cent, to 11,536.01 at the opening bell.

Talks between White House officials and House Speaker Nancy Pelosi continue to be in focus. Ms. Pelosi signalled on Thursday that the two sides continued to make progress in the discussions but also cautioned that it could be a while before a bill is finalized.

“Financial markets bounced around in noisy range trading overnight, mostly as the street finally prices in the reality that the U.S. Senate may not pass a stimulus agreement agreed between Nancy Pelosi and Donald Trump,” OANDA senior market analyst Jeffrey Halley said.

“On the stimulus front, progress continues to be made, apparently. Still, I suspect that President Trump’s influence over Senate Republicans has significantly weakened, moving inversely to his slump in national polls.”

On the corporate side, shares of Intel Corp. were down 10 per cent in early trading after the company reported mixed results following Thursday’s close. Intel raised its annual sales and adjusted profit forecast but also missed expectations for its high-margin data centre business. Revenue from the data center business fell 7 per cent to US$5.9-billion in the reported quarter, while analysts on average had expected revenue of US$6.21-billion, according to FactSet.

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American Express shares fell more than 2 per cent after the company after the company reported a 40-per-cent decline in quarterly profit on lower user spending. American Express also set aside US$665-million for potential defaults.

Net income fell to US$1.07-billion, or US$1.30 per share, for the third quarter ended Sept. 30, from US$1.76-billion, or US$2.08 per share, a year earlier.

In this country, The Globe and Mail reports this morning that the federal cabinet is deliberating a targeted bailout package for Canada’s airline industry that includes offers of low interest loans and rollbacks of airport fee increases to help it cope with the fallout from the coronavirus pandemic. The package of options that cabinet is reviewing recognizes that air travel is essential to the Canadian economy, and could come in the November economic statement or the next federal budget, expected in February or March, according to the report.

Overseas, major European markets were higher. The pan-European STOXX gained 0.89 per cent with bank stocks among the best performers after Barclays reported a much better-than-expected profit in the second quarter on lower impairment charges related to the pandemic. Britain’s FTSE 100 rose 1.60 per cent. Germany’s DAX added 1.16 per cent and France’s CAC 40 was up 1.41 per cent.

In Asia, Japan’s Nikkei closed up 0.18 per cent. Hong Kong’s Hang Seng gained 0.46 per cent.

Commodities

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Crude prices firmed but still looked set for a weekly decline as rising coronavirus infections around the globe continue to raise questions about the rebound in demand.

The day range on Brent is US$42.18 to US$42.67. The range on West Texas Intermediate is US$40.32 to US$40.80. Both gained more than 1 per cent during the previous session but still look likely to post weekly declines. For Brent, it would the first down week in three.

The impact of rising infections continues to be felt around the world with France extending curfews and a number of U.S. states reporting record daily increases on Thursday.

However, crude drew some support from recent comments out of Russia.

Axi chief market strategist Stephen Innes noted that Russian President Vladimir Putin said on Thursday that rising crude prices mean there’s no need to alter the current OPEC+ production agreement. However, he also said that Mr. Putin signalled that he was open to delaying production increases from January if conditions change.

“Russian producers have historically been the least eager to participate in OPEC+ cuts, bad on compliance, and quickest to ramp production when permitted,” Mr. Innes said in a note.

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“This early signal from Putin that Russia and Saudi Arabia are on the same page will support oil.”

The OPEC+ group, which includes Russia, is due to increase production by 2 million barrels per day in January 2021 as part of their plan gradually to pump more as demand recovers. OPEC+ made a record supply cut beginning in May to shore up collapsing prices.

In other commodities, gold prices gained, holding above the key $1,900 level.

Spot gold rose 0.2 per cent to US$1,907.96 per ounce and is up 0.5 per cent for the week. U.S. gold futures gained 0.3 per cent to US$1,909.40 per ounce.

“Gold is just waiting for U.S stimulus to get through and before the U.S. presidential election there is uncertainty about who is going to win, though it won’t change the trajectory for the market,” ANZ commodity strategist Soni Kumari said.

Currencies

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The Canadian dollar was higher as its U.S. counterpart held steady against most world currencies in the wake of the latest U.S. presidential debate but still looked set for a weekly decline.

The day range on the loonie so far is 76 US cents to 76.27 US cents. At last check, the dollar was closer to the upper end of that spread.

There were no major Canadian economic releases on the calendar Friday.

The U.S. dollar index was down 0.03 in early trading in Europe, just above of a seven-week low hit on Wednesday. It was still down about 0.7 per cent for the week, according to figures from Reuters.

RBC chief currency strategist Adam Cole said moves in the U.S. dollar were limited following last night’s debate.

“Snap opinion polls generally suggest Biden ‘won’ last night’s debate, though by a much narrower margin than the first debate,” Mr. Cole said. “In betting markets, the probability of Biden winning the presidential election rose 2 percentage points to 67 per cent and is only slightly below the high of 70 per cent two weeks ago.”

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Elsewhere, the euro was little changed against the U.S. dollar at US$1.1818.

The pound was also unchanged at US$1.3084.

More company news

Le Château Inc. says it is seeking court protection from creditors to allow it to shut down and liquidate its assets. Le Château’s application under the Companies' Creditors Arrangement Act will be heard today by a Quebec court. The clothing retailer says it can no longer continue its operations as a going concern. It says circumstances leave the company with no option other than to start the liquidation process.

Canfor Corp. says its net profit surged in the third quarter on record lumber earnings that were driven by an unprecedented increase in prices. The Vancouver-based forest products company says it earned $218.1-million or $1.74 per share in the three months ended Sept. 30. That compared with a loss of $88.5-million or 71 cents per share a year earlier. Adjusted net income increased to $259.4-million or $2.07 per share, up from a loss of $42.6-million or 34 cents per share in the third quarter of 2019. Canfor shares were up about 2 per cent in early trading in Toronto on Friday.

Barclays reported much better than expected third quarter earnings on Friday, as its consumer businesses swung back to profit and provisions against bad loans fell compared with the previous quarter. Barclays reported profit before tax of 1.1 billion pounds (US$1.44-billion) for the July-September period, double the 507 million pounds average of analysts' forecasts. The British lender booked credit impairment and provision charges for the quarter of 608 million pounds, below the 1 billion pounds analysts had expected.

The London Stock Exchange expects to close its US$27-billion purchase of data analytics company Refinitiv in the first-quarter of next year, as the group reported forecast-beating third-quarter income. The Refinitiv deal will expand LSE’s trading business and make it a major distributor and creator of market data. The transaction was announced last year but ran into regulatory hurdles in Europe as regulators raised concerns about its market share in European bond trading.

A California appeals court on Thursday upheld an order requiring Uber and Lyft to treat their California drivers as employees instead of independent contractors, less than two weeks before voters will be asked to exempt the ride-hailing giants from the state’s gig economy law. The decision won’t have any immediate impact because it doesn’t take effect for at least 30 days, well after the Nov. 3 vote on Proposition 22, The Associated Press reports.

Economic news

(9:45 a.m. ET) U.S. Markit Manufacturing PMI for October.

With Reuters and The Canadian Press

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