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Equities
Canada’s main stock index edged higher early Friday to mark a fourth consecutive session of gains as crude prices rose and retail sales figures came in ahead of forecasts. South of the border, Wall Street’s main indexes advanced, starting at record levels, with talks for a new U.S. stimulus package in focus.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 18.5 points, or 0.1 per cent, at 17,671.44.
In the U.S., at 9:34 a.m. ET, the Dow Jones Industrial Average was up 10.51 points, or 0.03 per cent, at 30,313.88, the S&P 500 was down 1.69 points, or 0.05 per cent, at 3,720.79, and the Nasdaq Composite was up 11.03 points, or 0.09 per cent, at 12,775.78.
“I’m not sure if I was overly optimistic, a little naïve or just caught up in the festive season earlier this week, but it seems negotiators on both sides of the Atlantic have decided they can squeeze out a few more days of talks before shaking hands - metaphorically, maybe under the circumstances - on a deal,” OANDA senior analyst Craig Erlam said.
“What that means is we could be carrying a hefty amount of event risk into the weekend which may explain some of the moves we’re seeing on the final trading day of the week.”
Sentiment continues to be underpinned by hopes that U.S. leaders are closing in on US$900-billion in additional aid to offset the impact of the coronavirus pandemic. On Thursday, Senate Majority Leader Mitch McConnell said that a bipartisan deal appears to be “close at hand.” House Speaker Nancy Pelosi sounded a similarly hopeful note, saying progress had been made in talks.
On the vaccine front, the U.S. Food and Drug Administration gave its backing to Moderna’s shot, moving it closer to FDA approval for public use. In Canada, the federal government is making plans to ship Moderna’s vaccine pending authorization of the treatment by Health Canada, which is expected soon.
On the corporate side, shares of BlackBerry Ltd. were down more than 8 per cent in early trading in Toronto after the company missed analysts’ estimates for third-quarter revenue. BlackBerry said revenue fell 18 per cent to US$218-million in the latest quarter. Analysts had been looking for revenue of US$219.7-million, according to IBES data from Refinitive. BlackBerry’s net loss widened to US$130-million, or 23 US cents per share, in the third quarter ended Nov. 30 from US$32-million, or 7 US cents.
Ahead of the open, Canadian investors will also got a reading on consumer spending in October. Statistics Canada said retail sales for the month rose 0.4 per cent, better than forecasts. Economists had been looking for a largely flat reading. Looking ahead to November, the government agency is forecasting that sales will be unchanged as the economy feels the impact of tightened COVID-19 restrictions.
Overseas, the pan-European STOXX 600 edged up 0.13 per cent in morning trading as Brexit talks continue. British Prime Minister Boris Johnston said Thursday that talks were in a serious situation. The European Union’s chief negotiator said Friday that the bloc and the United Kingdom are starting a “last attempt” to reach a post-Brexit trade deal, with EU fishing rights in British waters the biggest obstacle to an agreement.
Britain’s FTSE 100 was up 0.75 per cent. Germany’s DAX gained 0.30 per cent. France’s CAC 40 rose 0.14 per cent.
In Asia, Japan’s Nikkei finished down 0.16 per cent. Hong Kong’s Hang Seng lost 0.67 per cent.
Commodities
Crude prices were steady in early going, holding near their best levels since March, and looked set for weekly gains with the rollout of COVID-19 vaccines continuing to offset concerns about restrictions linked to the latest spike infections.
The day range on Brent is US$51.13 to US$51.60. The range on West Texas Intermediate is US$48.10 to US$48.49. Brent is on track for its seventh straight week of gains.
News that the FDA is advancing on the path to approving Moderna’s COVID-19 shot helped bolster prices.
“Given the near-term risks to the economy from COVID-19 as more and more countries reluctantly embrace lockdown once again, I do wonder whether we may see some profit taking just below this [US$49-US$50 in WTI] major level in oil,” OANDA’s Craig Erlam said in a note.
“The next month or two could be extremely challenging as the first vaccines are rolled out and lockdowns - perhaps the last - look inevitable in January, at least.”
Gold prices, meanwhile, pulled back from the one-month highs seen during the previous session as the U.S. dollar bounced off lows.
Spot gold dipped 0.3 per cent to US$1,879.46 per ounce. U.S. gold futures fell 0.3 per cent to US$1,884.20 per ounce. Gold is up more than 2 per cent on the week after hitting its best level since Nov. 16 on Thursday.
“What you’re seeing in terms of the gold markets today is a little bit of dollar strength after a very poor week for the U.S. dollar and a very good week for gold,” Michael Hewson, chief market analyst at CMC Markets UK, said.
“If you’ve taken out a long position in gold this week, then you’re going to want to pare back some of that heading into the weekend ... it’s sensible in the last four trading weeks of 2020 that you see a little bit of profit taking.”
Currencies
The Canadian dollar fell in early going as its U.S. counterpart bounced off recent lows against a basket of world currencies.
The day range on the loonie is 78.36 US cents to 78.61 US cents.
Canadian investors got a better-than-expected reading on retail sales. Statscan says sales rose 0.4 per cent in October. The Street had been expecting a flat reading. The agency says it expects sales to be unchanged in November.
On global markets, the U.S. dollar index recovered on the day and was last up 0.2 per cent just short of 90, but remained on track for a fall of 1 per cent over the week, according to figures from Reuters. It had reached its lowest in more than two years at 89.723 on Thursday.
The dollar rebounded as much as half a per cent against the yen but remains 0.5 per cent down versus the Japanese currency for the week.
The pound reversed some of its gains against the U.S. dollar and euro as talks over a Brexit trade deal between the UK and European Union continued.
Bitcoin was still trading around US$23,000 after hitting record levels on Thursday.
More company news
The Weston family says it is selling some of its shares to George Weston Ltd. and Loblaw Companies Ltd. in an internal reorganization. The sale by Galen Weston will leave him as controlling shareholder of bakery and real estate company George Weston Ltd., with 52.8 per cent of the outstanding shares. The companies say after the deal, George Weston Ltd. will have 52.6 per cent of the outstanding shares of the Loblaw grocery store and drug store company.
Friends and families kept apart by COVID this Christmas and New Year will not find their virtual gatherings over Zoom cut short by the usual 40-minute limit for free subscribers. Zoom Video Communications Inc, whose technology has become a feature of household get togethers in 2020′s socially distanced world, said it was removing the time limit for its free accounts on all meetings globally for the holiday season.
Alphabet Inc’s Google on Thursday faced its third major lawsuit as a group of 38 U.S. states and territories filed an antitrust complaint accusing Google of seeking to extend its search monopoly to dominate smart speakers, televisions and cars. The states are asking for their lawsuit to be consolidated with one filed by the Justice Department in October, according to a statement from the Colorado attorney general’s office. The complaint focuses on Google’s search business and search advertising, as well as what they said was an effort by Google to use exclusionary agreements to also dominate newer technologies. This would exclude, for example, competing virtual assistant technology such as Amazon’s Alexa.
U.S. delivery firm FedEx Corp said quarterly profit almost doubled after rate hikes and spiking volume helped lower the cost of delivering pandemic-fueled e-commerce purchases to residential addresses. Fiscal second quarter adjusted net income at FedEx jumped to $1.30-billion, or $4.83 per share, from $660-million, or $2.51 per share, a year earlier. Revenue grew 19% to $20.6-billion. Analysts expected earnings of $4.01 per share and revenue of $19.5-billion, according to Refinitiv data.
Economic news
(8:30 a.m. ET) Canada’s retail sales for October.
(8:30 a.m. ET) U.S. current account deficit for Q3.
(10 a.m. ET) U.S. leading indicator for November.
Also: Ottawa’s budget balance for October.
With Reuters and The Canadian Press
Terry Weber