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Equities
Wall Street futures were treading water early Wednesday as investors took a breather after pushing indexes to record highs during the previous session. Major European markets were also mixed after a firmer start. TSX futures wavered even as crude prices continued to gain.
Dow and S&P futures were hovering around break even ahead of the North American open. Nasdaq futures were marginally higher. On Tuesday, the Dow finished above 30,000 for the first time, buoyed by optimism over potential COVID-19 vaccines and events in Washington, including a formal recognition of the transition of power and the likely appointment of former Fed chair Janet Yellen as U.S. Treasury Secretary. The S&P/TSX Composite Index finished up about 1 per cent with energy stocks seeing a major rally.
U.S. markets will be closed on Thursday as Americans celebrate Thanksgiving.
“Market sentiment remains positive, but investors are waiting for the next big catalyst that could give the stock market another significant boost,” Axi market analyst Milan Cutkovic said.
“The COVID-19 vaccine results are great news, but have been priced in by now. Investors are very eager to gather more insights about the approval process and distribution plans, which could give them a better idea how long it will take to bring the pandemic under control,” he said.
U.S. investors also got a weaker-than-expected reading on jobless claims. The U.S. Labor Department said weekly claims for initial unemployment benefits totalled 778,000 from 748,000 the week before. Economists had been expecting a number closer to 730,000 in the latest report. However, October durable goods orders came in ahead of forecasts, climbing 1.3 per cent, compared with expectations of a 0.8-per-cent increase.
In this country, Quebec-based convenience store operator Alimentation Couche-Tard Inc. posted higher profit in the latest quarter as the COVID-19 pandemic saw consumers consolidate shopping trips. The company says it earned US$757-million, or 68 U.S. cents per diluted share, compared with US$578.6 million, or 51 US cents, in the same period last year. Couche-Tard reported revenue of US$10-66-billion in the quarter, down from US$13.68-billion a year earlier.
Analysts surveyed by Refinitiv expected net income of US$559-million, or 50 U.S. cents per share, on sales of US$11.17-billion.
Ski-Doo maker BRP Inc. topped expectations in its latest quarter and hiked its guidance for the year. BRP says it now expects normalized earnings per share between $5.00 and $5.25 for the year, up from earlier guidance for between $3.65 and $3.95. In the most recent quarter, BRP reported net income of $198.7-million or $2.22 per diluted share for its quarter ended Oct. 31, up from $135.3-million or $1.49 per diluted share in the same quarter last year.
Overseas, the pan-European STOXX 600 was down 0.28 per cent by afternoon. Britain’s FTSE 100 fell 0.58 per cent. Germany’s DAX and France’s CAC 40 fell 0.22 per cent and 0.14 per cent.
In Asia, markets had a mixed finish. Japan’s Nikkei ended up 0.50 per cent. The Shanghai Composite Index slid 1.19 per cent. Hong Kong’s Hang Seng lost 0.31 per cent.
Commodities
Crude prices continued to rally with vaccine-inspired optimism helping offset new figures showing a rise in U.S. inventories.
The day range on Brent is US$47.72 to US$48.75. The range on West Texas Intermediate is US$44.73 to US$45.72. Both benchmarks gained about 4 per cent on Tuesday. Wednesday marks the fourth consecutive session of gains.
“It is hard not to get concerned about how quickly oil has priced in the recent good news,” Axi chief market strategist Stephen Innes said.
Markets, he said, are also betting that OPEC and it’s allies will agree to put off production increases planned for January. The expectation is that the output increase will be delayed for three months.
“The oil will be susceptible in the near-term to any outcome seen as indicating that the OPEC tensions mentioned in recent press reports are real and may threaten the implementation of cuts during what remains an uncertain period for oil,” he said.
Recent reports have suggested that United Arab Emirates is rethinking its position within the group and has called into question the future and purpose of the cartel.
Wednesday’s price gains were tempered somewhat by figures from the American Petroleum Institute showing that U.S. crude stocks rose by 3.8 million barrels last week to about 490 million barrels. Analysts polled by Reuters had been expecting a smaller increase of about 127,000 barrels.
More official U.S. government figures are due later Wednesday morning.
Elsewhere, gold prices steadied, helped by a weaker U.S. dollar.
Spot gold rose 0.2 per cent to US$1,811.00 per ounce. On Tuesday, it hit its lowest since July 17 at US$1,800.01.
U.S. gold futures also rose 0.2 per cent to US$1,808.80 per ounce.
“It’s clearly bargain hunting at present. Prices have fallen over $150 in the past two weeks and investors are grabbing this opportunity to take positions,” independent analyst Robin Bhar told Reuters.
Currencies
The Canadian dollar dipped slightly after touching its best level in two weeks during the previous session while the U.S. dollar continues to nurse recent losses.
The day range on the loonie is 76.76 US cents to 76.98 US cents.
“There has been plenty of interest to buy CAD of late, though our positioning monitor is reasonably neutral.” Elsa Lignos, global head of FX strategy for RBC, said.
There were no major Canadian economic reports due Wednesday.
On global markets, the U.S. dollar index, which weighs the greenback against a selection of currencies, was at 92.012 after falling 0.4 per cent on Tuesday. It was last down 0.1 per cent on the day, according to figures from Reuters.
The U.S. dollar stood at US$1.1917 against the euro on Wednesday, close to a two-week low. The British pound bought US $1.3365, close to its highest in more than two months.
Against the yen, the U.S. dollar was steady at 104.41.
Bitcoin, meanwhile, climbed to US$19,221 just short of its record of US$19,666 from December 2017.
More company news
Gap Inc reported a 32% slump in quarterly profit on Tuesday, hurt by higher marketing expenses. The retailer reported a surprise rise in third-quarter quarter comparable sales, helped by online demand for its Athleta athleisure wear and Old Navy apparel from stuck-at-home customers. The San Francisco-based retailer reported a net income of US$95-million, or 25 US cents per share, in the quarter ended Oct. 31, down from a profit of US$140-million, or 37 US cents per share, a year earlier. The results were released after Tuesday’s close.
German media group Bertelsmann will acquire U.S. publisher Simon & Schuster from ViacomCBS for more than US$2-billion, a source with direct knowledge of the matter told Reuters on Thursday. Bertelsmann, owner of Penguin Random House, outbid Rupert Murdoch’s News Corp for the publisher of authors Dan Brown, Hillary Clinton and Stephen King that Viacom put up for sale earlier this year.
Deere & Co reported higher than expected quarterly profit as rising crop prices, aggressive government subsidy payments and replacement demand for an aging fleet lifted the demand for farm machines. The Moline, Illinois-based company reported earnings of US$2.39 per share compared with US$2.27 per share last year. Analysts surveyed by Refinitiv, on average, expected quarterly earnings to decline to US$1.45 per share.
Deere said it expects net income of about $3.6 billion-$4.0 billion in the fiscal year 2021.
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 21.
(8:30 a.m. ET) U.S. real GDP for Q3.
(8:30 a.m. ET) U.S. advance economic indicators report for October.
(8:30 a.m. ET) U.S. durable goods orders for October.
(10 a.m. ET) U.S. new home sales for October.
(10 a.m. ET) U.S. personal income and spending for October.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for November.
(10 a.m. ET) U.S. core PCE price index for October.
(2 p.m. ET) U.S. Fed minutes released.
With Reuters and The Canadian Press
Terry Weber