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Equities
Canada’s main stock index was treading water early Thursday with weakness in energy shares offset gains by materials stocks.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 7.39 points, or 0.04 per cent, at 17,320.46.
U.S. markets are closed for the Thanksgiving holiday.
Early Thursday, MSCI’s all-country index, which measures stocks in 49 countries, was up 0.2 per cent, not far off record levels seen on Wednesday.
“The U.S. stock market will remain closed today as the country celebrates Thanksgiving,” CMC Markets analyst David Madden said in a note. “Some US-based traders and investors will be taking Friday off too.
“Yesterday, there was a sense that some dealers were winding down for the week, even though the NYSE will be open for limited trading on Friday. Any of the financial markets that are open today will probably experience low volatility.”
In this country, Bank of Canada Governor Tiff Macklem and senior deputy governor Carolyn Wilkins are set to appear before the House of Commons Standing Committee on Finance to deliver their semi-annual testimony. Their opening statement will be published by the central bank at 3:30 p.m. ET.
Overseas, the pan-European STOXX 600 slipped 0.08 per cent in morning trading. That index has gained more than 14 per cent in November, marking its best month on record. Britain’s FTSE 100 fell 0.55 per cent by afternoon. France’s CAC 40 slid 0.10 per cent. Germany’s DAX added 0.03 per cent.
On Wednesday, German chancellor Angela Merkel agreed with leaders of that country’s 16 federal states to extend measures aimed at curbing the spread of the coronavirus until at least Dec. 20 and cautioned that they could remain in place into January.
In Asia, Japan’s Nikkei finished up 0.91 per cent. Hong Kong’s Hang Seng gained 0.56 per cent. The Shanghai Composite Index closed up 0.22 per cent.
Commodities
Crude prices paused after touching their best levels in seven months ahead of next week’s meeting of OPEC and it’s allies.
The day range on Brent is US$47.57 to US$49.09. The range on West Texas Intermediate is US$44.74 to US$46.09.
On Wednesday, Brent gained 1.6 per cent while WTI rose about 1.8 per cent.
“I worry about how quickly oil has priced in the recent good news, including expectations that OPEC will extend current production cuts by 3-6 months,” Axi chief market analyst Stephen Innes said.
“It remains the market base case but oil will be very sensitive 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 a very uncertain time from prompt oil demand with COVID still in the air.”
The OPEC+ group meets on Monday to discuss planned production increases scheduled to take effect in January. Markets are expecting a delay in that move given the impact of COVID-19 restrictions around the world. However, markets have also been concerned about recent reports suggesting that UAE is question its role in the cartel.
Prices drew some support for weekly U.S. inventory figures from the U.S. Energy Information Administration, which showed stockpiles fell 754,000 barrels last week. Analysts had been expecting an increase of 127,000 barrels.
However, gasoline demand for the week fell by 128,000 barrels a day to the lowest levels since June, again raising concerns about demand,
In other commodities, gold prices rose, helped by a weaker U.S. dollar.
Spot gold rose 0.5 per cent to US$1,813.40 per ounce. U.S. gold futures were up 0.4 per cent to US$1,812.10.
“We’ve had a relatively soft [U.S.] dollar and it hasn’t given that much of a lift to gold during the decline. Now it’s giving a little bit of a tailwind, giving it a lift back towards $1,860,” independent analyst Ross Norman said.
Currencies
The Canadian dollar was steady in early going as its U.S. counterpart struggled on world markets amid weaker U.S. economic news and continued optimism over a COVID-19 vaccine.
The day range on the loonie is 76.84 US cents to 76.98 US cents.
There were no major economic reports on the Canadian calendar, aside from Mr. Macklem and Ms. Wilkins appearance before the federal finance committee later in the day.
On global markets, the U.S. dollar index was little changed at 91.99 after nearing a three-month low of 91.84. On Wednesday, markets got a weaker-than-expected reading on U.S. weekly jobless claims. The Federal Reserve, in minutes from its latest meeting, indicated it may give guidance on its bond-buying “fairly soon”.
Euro/dollar was last trading up 0.1 per cent at US$1.1924 after rising to US$1.1941, its highest since Sept. 1.
Britain’s pound fell 0.2 per cent to US$1.3355 after rising to a three-month high of US$1.3399, and was also down by 0.3 per cent against the euro at 89.22 pence, according to figures from Reuters.
Trading was was subdued on Thursday because U.S. financial markets are closed for the Thanksgiving holiday.
More company news
Walt Disney Co said on it would lay off about 32,000 workers, primarily at its theme parks, an increase from the 28,000 it announced in September, as the company struggles with limited customers due to the coronavirus pandemic. The layoffs will be in the first half of 2021, the company said in a filing with the Securities and Exchange Commission. A spokesman for Disney confirmed that the latest figures include the 28,000 layoffs announced earlier, according to Reuters.
Cloud-based software company Salesforce.com Inc is in talks to acquire workplace messaging app Slack Technologies Inc as it seeks to expand its offerings to businesses, people familiar with the matter told Reuters. Salesforce’s bid comes as Slack struggles to fully capitalize on the switch to remote working during the COVID-19 pandemic in the face of fierce competition from Microsoft Corp’s Teams and other workplace apps
Economic news
(8:30 a.m. ET) Canada’s Survey of Employment, Payrolls and Hours for September
With Reuters and The Canadian Press
Terry Weber