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Equities
Canada’s main stock index was little changed at Wednesday’s open with energy stocks helping buoy sentiment as crude prices gained. South of the border, indexes managed modest gains in early trading in the wake of more positive headlines about a potential COVID-19 vaccine.
At 9:35 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 6.64 points, or 0.04 per cent, at 16,954.7.
On Wall Street, the S&P 500 rose 1.81 points, or 0.05 per cent, to 3,611.34 shortly after the market opened. The Dow Jones Industrial Average gained 80.75 points, or 0.27 per cent, to 29,864.10. The Nasdaq Composite was up 1.03 points or 0.01 per cent, at 11,900.37.
Early Wednesday, Pfizer Inc said final results from the late-stage trial of its COVID-19 vaccine, developed with German partner BioNTech SE, show it was 95 per cent effective. The drugmaker also said it had the required two-months of safety data and would apply for emergency U.S. authorization within days.
Pfizer shaeres were up about 3 per cent in morning trading.
“In the immediate future, a lot of good news has been priced in very quickly and there may be a small void over the next couple of weeks that allows for a bit of a corrective move,” OANDA senior analyst Craig Erlam said.
“And with COVID cases surging around the world, this could be the catalyst if lockdowns don’t quickly bring the numbers back under control. This lockdown is very different to the last and that may have a significant impact on the success of it.”
Elsewhere, retail stocks remained in the spotlight as more earnings came in from that sector.
Target shares gained in the premarket after the retailer easily topped Street forecasts for same-store sales growth in the latest quarter. Comparable sales, which include online and store sales, rose 20.7 per cent in the third quarter, far better than the 11.31-per-cent increase, according to IBES data from Refinitiv. Shares were up more than 3 per cent shortly after the opening bell.
Lowe’s shares fell nearly 6 per cent after the home improvement retailer forecast earnings in the holiday quarter below analysts' estimates. Lowe’s said it expects earnings of $1.10 to $1.20 per share in the fourth quarter, compared with analysts' average estimate of $1.17 per share. However, it expects same-store sales to from 15% to 20%, ahead of analysts' estimates.
On this side of the border, investors got results from grocer Metro Inc. The Globe’s Susan Krashinsky Robertson reports Metro Inc.'s sales and profits grew once more in its fourth quarter, as the COVID-19 pandemic continues to provide an unusual level of growth in the grocery sector. The Montreal-based retailer reported $4.1-billion in sales for the 12 weeks ended Sept. 26, up 7.4 per cent compared to the same period last year. Same-store sales -- an important metric that tracks sales growth not affected by new store openings -- rose 10 per cent at its grocery banners in the fourth quarter.
Canadian markets also got the latest reading on inflation. Statistics Canada said the annual rate of inflation ticked higher to 0.7 per cent in October from 0.5 per cent in September. On a monthly basis, consumer prices rose 0.4 per cent in October.
Overseas, the pan-European STOXX 600 was up 0.43 per cent by early afternoon. Britain’s FTSE 100 rose 0.32 per cent. Germany’s DAX and France’s CAC 40 gained 0.37 per cent and 0.55 per cent, respectively.
In Asia, Japan’s Nikkei fell 1.10 per cent. Hong Kong’s Hang Seng rose 0.49 per cent.
Commodities
Crude prices advanced as markets remained optimistic that OPEC and its allies will extend production cuts into the new year when they meet later this month.
The day range on Brent is US$43.48 to US$44.25. The range on West Texas Intermediate is US$41.08 to US$41.94.
An OPEC+ committee met on Tuesday but made no formal recommendation. However, Saudi Arabia called on members of the OPEC+ group to be flexible in responding to oil market needs.
A full policy meeting is scheduled for Nov. 30 and Dec. 1.
“With no clear signals from OPEC+ as yet about modifying their production cut schedule, fading upward momentum will make oil vulnerable to a deeper correction lower,” OANDA senior analyst Jeffrey Halley said in an early note.
Crude prices had been under pressure through much of the overnight period after the American Petroleum Institute reported a bigger-than-expected rise in weekly inventories.
The industry group said late Tuesday that U.S. crude stockpiles rose by 4.2 million barrels last week. Analysts had been expecting an increase closer to 1.7 million barrels.
More official numbers are due shortly after Wednesday’s open from the U.S. Energy Information Administration.
In other commodities, gold prices edged higher.
Spot gold rose 0.1 per cent to US$1,880.81, while U.S. gold futures were down 0.4 per cent at US$1,878.30. Gold fell more than 1 per cent early this week after Moderna reported its COVID-19 vaccine candidate was nearly 95 per cent effective in trials.
“Gold is caught between the conflicting narrative of surging COVID-19 cases and vaccine news,” Axi’s Stephen Innes said.
“Despite being supported by financial fragility and ongoing Fed policies, the yellow metal still faces an uphill battle to rally.”
Currencies
The Canadian dollar was higher in early going as its U.S. counterpart slid to its lowest level in a week against a group of world currencies.
The day range on the loonie so far is 76.24 US cents to 76.58 US cents.
“The CAD remains a slave to external factors, particularly the broader market risk tone, as well as energy prices; these two drivers are supporting a firm undertone for the CAD at present but obviously leave it susceptible to sudden setbacks,” Shaun Osborne, chief FX strategist with Scotiabank, said.
On global markets, the greenback came under pressure after Federal Reserve chair Jerome Powell said on Tuesday that the U.S. economic recovery had a “long way” to go. Those comments followed a weaker-than-expected reading on U.S. retail sales.
Against a basket of currencies the dollar eased to 92.250, its lowest level since November 9.
“The U.S. dollar drifted lower overnight following disappointing U.S. retail sales and with increasing concerns about the downstream effects of the resurgent COVID-19 pandemic,” OANDA’s Jeffrey Halley said.
“The data saw US Treasury yields move lower as well, and I suspect that Q3′s gains will be much harder for the U.S. to match in Q4.”
That, he said, leaves the Federal Reserve meeting “well and truly live” in December, with further easing likely to add to the downward pressures on the US dollar heading into 2021.
Elsewhere, bitcoin continued to surge over the US$18,000 mark. Bitcoin hasn’t crossed that level in three years, according to figures from Reuters.
More company news
British insurance group RSA is backing a US$9.55-billion cash offer from Canada’s Intact Financial and Denmark’s Tryg in one of Europe’s biggest financial takeover bids this year. RSA’s directors backed the Intact-Tryg bid unanimously and recommended shareholders vote in favor of the consortium’s offer, the company said on Wednesday, having first flagged the approach early this month.
After nearly two years of scrutiny, corporate upheaval and a standoff with global regulators, Boeing Co won approval on Wednesday from the U.S. Federal Aviation Administration to fly its 737 MAX jet again after two fatal disasters. The FAA detailed software upgrades and training changes Boeing must make in order for it to resume commercial flights after a 20-month grounding, the longest in commercial aviation history. Boeing stock was up about 3 per cent Wednesday morning.
Economic news
(8:15 a.m. ET) Bank of Canada Deputy Governor Carolyn Wilkins joins a panel on “Women’s Leadership Driving an Inclusive Recovery” at the Women’s Forum Global Meeting videoconference
(8:30 a.m. ET) Canadian CPI for October.
(8:30 a.m. ET) U.S. housing starts for October.
(8:30 a.m. ET) U.S. building permits for October.
With Reuters and The Canadian Press
Terry Weber