Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
Equities
Canada’s main stock index opened higher Monday, buoyed by broader global economic optimism. On Wall Street, key indexes were also up, with the S&P 500 touching record levels, after a better-than-forecast reading on U.S. hiring in March.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 74.7 points, or 0.39 per cent, at 19,065.02.
In the U.S., the Dow Jones Industrial Average rose 69.2 points, or 0.21 per cent, at the open to 33222.38. The S&P 500 rose 14.6 points, or 0.36 per cent, at the open to 4034.44, while the Nasdaq Composite rose 114.8 points, or 0.85 per cent, to 13594.899 at the opening bell.
Canadian and U.S. markets were returning to work after a long weekend. On Friday, the U.S. Labor Department reported that nonfarm payrolls jumped by 916,000 positions in March, the biggest gain since August. Economists had been forecasting an increase of 647,000. February’s increase, meanwhile, was revised higher to 468,000.
“Markets are at a critical stepping stone phase of the reflation trade where the data needs to confirm what markets have been pricing up until now,” Axi chief market strategist Stephen Innes said.
“And while [the March jobs numbers] did check all the boxes, it’s only the first step in a long stairway climbing adventure that is bound to have a misstep or two.”
In this country, shares of Air Canada and Transat will be in focus after Air Canada scrapped its $180-million takeover of the smaller rival, citing antitrust hurdles from European regulators.
The Globe’s Eric Atkins reports that the termination of the proposed merger of Canada’s biggest and third-biggest airlines throws the future of the money-losing Montreal-based Transat into question. The deal, announced in June, 2019, was slashed in price from $720-million in October, 2020, owing to the collapse in demand for air travel during the pandemic.
Air Canada shares were up more than 2 per cent in early trading in Toronto. Transat stock dropped 17 per cent.
Overseas, Japan’s Nikkei gained 0.79 per cent although trading in the region was muted with many markets still closed for holidays.
Major European markets were closed.
Commodities
Crude prices slid on rising supply from OPEC+ and higher Iranian output.
The day range on Brent is US$63.33 to US$64.81. The range on West Texas Intermediate is US$60.03 to US$61.50.
Last week, OPEC and its allies agreed to monthly production hikes from May to July while Iran is also increasing supply.
“It is still a very cautious and orderly ramp-up from OPEC+ but still allows for a tight oil market as U.S. summer driving season arrives on cue,” Axi’s Stephen Innes said.
Crude prices have rebounded from historic lows last year, helped by optimism over the rollout of vaccines and the expected recovery in demand.
However, continued spikes in infections in some regions continue to weigh on prices.
“Ultimately, with OPEC+ showing the nerve to increase barrels into peak U.S. driving season, it signalled a decisive vote of confidence to the U.S. vaccine rollout and the catch-up expectations in some of the harder hit pockets of the world,” Mr. Innes said.
In other commodities, gold prices eased.
Spot gold was down 0.1 per cent to US$1,726.36 per ounce. Gold futures were flat at US$11,762.40 per ounce.
“Strong payroll data has boosted the dollar and yields and is weighing on gold prices. I think gold’s primary trend is bearish,” said DailyFX strategist Margaret Yang.
“Global economic growth is definitely taking a positive turn, however, it is uneven. Growth in the U.S. is particularly strong, but parts of the EU are having a challenging time with the third wave of virus.”
Currencies
The Canadian dollar was firmer in early going as its U.S. counterpart held steady against a group of global currencies in the wake of a better-than-expected reading on U.S. hiring in March.
The day range on the loonie is 79.41 US cents to 79.63 US cents.
For the Canadian dollar, the week’s big news comes Friday with the release of this country’s March jobs figures. Economists are expecting to see an increase of about 75,000 positions for the month while the jobless rate is seen dipping to 8.1 per cent from February’s 8.2 per cent.
“Markets will look ahead to Friday’s LFS [labour force survey] release after U.S. nonfarm payrolls surprised with a 900k+ gain,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“The employment report will be the final major data point that the BoC will receive ahead of its Apr 21 meeting where most economists expect the bank to announce a reduction in its weekly pace of QE. Today, the CAD is likely to follow the risk tone in (thin) markets.”
On world markets, the U.S. dollar index against a basket of six major currencies was little changed at 93.015.
The U.S. dollar was last quoted at 110.62 yen, not far from its strongest level in a year, according to figures from Reuters.
Against the euro, the U.S. dollar traded at US$1.1760, which is close to a five-month high. The British pound held steady at US$1.3826.
The U.S. dollar rose to 0.9430 Swiss franc.
More company news
Oil and gas company Whitecap Resources Inc said on Monday it will acquire Kicking Horse Oil & Gas Ltd, a privately-held indirect subsidiary of Quantum Energy Partners, for $300 million in a stock-and-cash deal. Whitecap’s indirect acquisition of Kicking Horse consists of 34.5 million Whitecap common shares and $56 million in cash, along with the assumption of net debt estimated at $54 million as of Feb. 28.
Shares of Tesla Inc were up about 7.5% in pre-market trading on Monday, after the world’s most valuable carmaker posted record deliveries as a solid demand for its electric cars offset the impact of a global shortage of auto parts. Tesla delivered 184,800 vehicles globally during the first quarter, above estimates of 177,822 vehicles, according to Refinitiv data.
South Korea’s LG Electronics Inc will wind down its loss-making mobile division after failing to find a buyer, a move that is set to make it the first major smartphone brand to completely withdraw from the market. Its decision to pull out will leave its 10% share in North America, where it is the No. 3 brand, to be absorbed by Samsung Electronics and Apple Inc with its domestic rival expected to have the edge.
GameStop Corp said it may sell up to 3.5 million shares as it tries to take advantage of the stock price surge following the Reddit-driven trading frenzy earlier this year. The company also said global sales for the nine-week period ending April 4 rose about 11 per cent.
Economic news
(9:45 a.m. ET) U.S. Markit services and composite PMI for March.
(10 a.m. ET) U.S. factory orders for February.
(10 a.m. ET) U.S. ISM Services PMI for March.
With Reuters and The Canadian Press
Terry Weber