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Equities

Indexes on both sides of the border opened higher Wednesday as investors looked past the uncertain U.S. election results but remained braced for volatility in the days ahead.

At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 92.69 points, or 0.58 per cent, at 16,031.84.

On Wall Street, the Dow Jones Industrial Average rose 32.80 points, or 0.12 per cent, at the open to 27,512.83.

The S&P 500 opened higher by 37.30 points, or 1.11 per cent, at 3,406.46, while the Nasdaq Composite gained 283.20 points, or 2.54 per cent, to 11,443.78 at the opening bell.

“Not a great night for the pollsters and arguably the worst possible outcome for both the markets and the prospect of a peaceful outcome,” OANDA senior analyst Craig Erlam said.

“While the markets look perfectly comfortable with how things are going, with only modest risk aversion being seen and stock markets doing quite well under the circumstances, that may not continue if unrest and challenges follow,” he said.

U.S. election live updates: Vote too close to call as presidency hinges on key states

Early Wednesday, Democratic candidate Joe Biden had a narrow lead in electoral college votes but the race was too tight to call.

Mr. Biden has predicted he will defeat U.S. President Donald Trump while Mr. Trump prematurely claimed victory and vowed to take the results of the election to the U.S. Supreme Court.

For the day ahead, the U.S. Federal Reserve also begins its two-day meeting, culminating with its latest decision on interest rates Thursday afternoon. Markets aren’t expecting a move from the central bank but will be watching for hints about future actions, given the current uncertainty stemming from both the U.S. election and the rise of coronavirus infections.

Canadian investors also got international trade data for September.

Statscan says this country’s trade deficit widened slightly to $3.3-billion in September, from $3.2-billion in August. Exports were up 1.5 per cent, led by higher aircraft and lumber shipments. Imports also rose 1.5 per cent on higher crude oil imports.

After the markets close, Canadian investors will get results from Sun Life Financial.

Overseas, major European markets shifted higher after a weaker start with the pan-European up 1.12 per cent. Britain’s FTSE 100 rose 0.86 per cent. Germany’s DAX gained 0.86 per cent and France’s CAC 40 was up 1.17 per cent.

In Asia, Japan’s Nikkei rose 1.72 per cent. Hong Kong’s Hang Seng lost 0.21 per cent.

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Commodities

Crude prices gained as investors await the outcome of the U.S. election and new figures showed a decline in weekly U.S. inventories.

The day range on Brent is US$39.42 to US$40.80 The range on West Texas Intermediate was US$37.26 to US$38.92. Both benchmarks were up about 2 per cent in the predawn period after struggling overnight.

“Take a sprinkling of coronavirus jitters, a dash of renewed lockdowns, a dusting of post-US election unease, a helping of OPEC+ uncertainty, then mix together. The result is one hell of a murky dish,” Stephen Brennock at oil broker PVM, told Reuters.

Prices drew some support from a report from the American Petroleum Institute showing that weekly crude stockpiles fell by 8 million barrels to about 487 million. Analysts polled by Reuters had been looking for an increase of 890,000 barrels.

More official numbers are due later Wednesday morning from the U.S. Energy Information administration.

Also supporting prices was Algeria’s support for the deferral of a planned increase in OPEC+ oil output from January as well as Russia’s energy minister raising this prospect with the country’s oil producers, according to a Reuters report.

Elsewhere, gold fell 1 per cent on Wednesday as the U.S. dollar gained.

Spot gold fell 0.8 per cent to US$1,893.01 per ounce. U.S. gold futures dropped 0.9 per cent to US$1,893.40.

“We have a little bit of safe haven demand for the [U.S.] dollar, which is weighing on gold and maybe the gold market needs a little more time to digest this and see whether this uncertainty could really develop into a very unpleasant scenario,” said Julius Baer analyst Carsten Menke.

Currencies

The Canadian dollar was weaker as its U.S. counterpart gained with investors seeking out safer holdings.

The day range on the loonie is 75.20 US cents to 76.35 US cents.

In terms of domestic releases, Canadian investors got international trade figures that showed a slightly wider trade deficit in September, although the loonie’s direction will likely be dictated by broader market forces.

Early Wednesday, the U.S. dollar gained while riskier currencies slid amid a tight race for the White House. Markets had largely been pricing in a more decisive victory by Mr. Biden.

“No Democrat landslide, Senate likely a Republican hold, big blue wave trades unwinding. The fear of a contested outcome has not really materialized in risk off yet, but it does unfortunately seem more likely in the day ahead,” Elsa Lignos, RBC’s global head of FX strategy, said in a note.

“That should mean Japanese yen higher, USD generally doing better.”

The U.S. dollar was up 1 per cent as European markets opened, while the offshore-traded yuan, Australian dollar and Norwegian krone slid, according to Reuters figures.

“One of the few things clear so far is that we are not going to see a Democrat landslide win as polls had suggested. That has wrong-footed an FX market which was positioned for some clarity,” said Chris Turner, global head of markets at ING.

More company news

A union of workers at Chile´s Candelaria copper mine, owned by Canada’s Lundin Mining Corp , said late Tuesday it had rejected yet another contract offer from the company and will push forward with a nearly month-long strike that has shut down the mine. Lundin said earlier this week it had submitted a new contract offer in a bid to end the strike, which began on October 8. A second union joined in the walk-off later in the month, forcing the mine´s closure.

Dollarama Inc. says Pomerleau executive Jean-Philippe Towner will become its next chief financial officer on March 1, 2021. Towner will replace Micheal Ross, who will step down after a decade in the job. Mr. Ross, who joined Dollarama shortly after its initial public offering, is expected to stay on in an advisory capacity until his retirement.

Voters in California backed a ballot proposal by Uber and its allies that cements app-based food delivery and ride-hail drivers' status as independent contractors, not employees, according to a projection by data provider Edison Research. The measure, known as Proposition 22, marked the culmination of years of legal and legislative wrangling over a business model that introduced millions of people to the convenience of ordering food or a ride with the push of a button.

Hilton Worldwide Holdings Inc reported a quarterly loss on Wednesday, compared to a year-ago profit, as the COVID-19 pandemic disrupted global travel. Net loss attributable to stockholders was $79-million, or 28 cents per share, in the third quarter ended Sept. 30, compared with a net income of $288-million, or $1.00 per share, a year earlier.

Economic news

(8:15 a.m. ET) U.S. ADP National Employment Report for October.

(8:30 a.m. ET) Canada’s merchandise trade deficit for September.

(8:30 a.m. ET) U.S. goods and services trade deficit for September.

(10 a.m. ET) U.S. ISM Services PMI for October.

Also: U.S. Fed meeting begins

With Reuters and The Canadian Press

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