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Equities

Canada’s main stock index started higher Wednesday with gains in energy stocks helping blunt the impact of a decline in retail sales. On Wall Street, the tech-heavy Nasdaq hit another record just after the start of trading as Federal Reserve officials look to ease concerns over tightening monetary policy.

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At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 16.77 points, or 0.08 per cent, at 20,217.42.

In the U.S., the Nasdaq Composite rose 10.1 points, or 0.07 per cent, to 14263.381 at the opening bell.

The Dow Jones Industrial Average rose 3.0 points, or 0.01 per cent, at the open to 33948.54, while the S&P 500 rose 2.8 points, or 0.07 per cent, at the open to 4249.27.

“Fed Chairman Jerome Powell stuck to his script [on Tuesday], as he beat the transitory inflation drum and dampened expectations of a rate hike,” OANDA senior analyst Jeffrey Halley said in an early note.

“Although the reaction in markets was not spectacular, Powell’s comments greenlighted a further recovery in U.S. stocks.”

Appearing before Congress, Mr. Powell said the central bank intends to encourage a “broad and inclusive” recovery of the job market and won’t rush to raise rates despite rising price pressures.

“We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances,” Mr. Powell said.

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In this country, Sobeys-parent Empire Co. Ltd. raised its quarterly dividend to 15 cents per share, up from 13 cents. The company also reported a profit of $171.9-million or 64 cents per diluted share in the most recent quarter, compared with $177.8-million or 66 cents per diluted share a year earlier.

Markets also got a reading on Canadian retail sales. Statistics Canada says sales fell 5.7 per cent in April, slightly more than the 5.1-per-cent decline the agency had forecast a month ago. Statscan also said it now expects to see a decline of 3.2 per cent in May as COVID-19 restrictions remained in place in some regions.

Overseas, the pan-European STOXX 600 slid 0.25 per cent in afternoon trading. Britain’s FTSE 100 edged up 0.41 per cent. Germany’s DAX fell 0.55 per cent and France’s CAC 40 lost 0.43 per cent.

In Asia, Japan’s Nikkei slid 0.03 per cent. Hong Kong’s Hang Seng jumped 1.79 per cent.

Commodities

Crude prices gained, with Brent and West Texas Intermediate near multiyear highs, after new figures showed a bigger-than-expected decline in U.S. inventories, underpinning optimism about a recovery in demand.

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The day range on Brent is US$74.40 to US$75.66. The range on West Texas Intermediate is US$72.82 to US$73.58. Early in the session, Brent touched its best level since October 2018. WTI was also near a high last seen in 2018.

The gains came after the American Petroleum Institute reported that crude stocks fell by a bigger than expected 7.2 million barrels last week.

More official figures are due later this morning from the U.S. Energy Information Administration.

“Underlying demand in the physical market means that any corrections lower will remain shallow and short,” OANDA’s Jeffrey Halley said.

In other commodities, gold prices firmed after Mr. Powell’s comments tempered the U.S. dollar’s moves.

Spot gold rose 0.2 per cent to US$1,782.46 per ounce and U.S. gold futures gained 0.3 per cent at US$1,782.40.

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Currencies

The Canadian dollar was firmer while its U.S. counterpart was flat against a basket of currencies after Fed chair Jerome Powell assured markets that U.S. rates aren’t likely to rise anytime soon.

The day range on the loonie is 81.11 US cents to 81.39 US cents.

Ahead of the start of trading, Statscan said retail sales fell 5.7 per cent in April. The agency also forecast a decline of more than 3 per cent in May.

On world markets, the U.S. dollar index was flat at 91.772, holding near its lowest since June 17 and nearly a third below a two-month high hit last week, according to figures from Reuters.

The euro steadied below US$1.1950 and was on track for a third consecutive day of gains as PMI data showed that euro zone business growth accelerated at its fastest pace in 15 years in June following the easing of more lockdown measures.

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In cryptocurrencies, bitcoin was up around 5 per cent on the day, above the US$34,000 mark after dropping to as low as US$28,600 on Tuesday.

More company news

CIBC says it has made a strategic investment in Chicago-based Loop Capital, a financial services firm providing investment banking, brokerage, asset management and wealth management services to corporations, municipalities, hospitals, universities, institutional investors and high net worth individuals. Financial terms weren’t disclosed.

GSK set out plans on Wednesday to turn its consumer healthcare business into a separately listed company, aiming to strengthen drug development at its pharmaceuticals business with an 8 billion pound (US $11-billion) windfall. The demerger planned for the middle of next year will allow GSK to focus on bolstering a core drugs business, which has been hit by a lack of fast-growing products and patients deferring treatments due to the COVID-19 pandemic.

Economic news

(8:30 a.m. ET) Canadian retail sales for April.

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(8:30 a.m. ET) U.S. current account deficit for Q1.

(9:45 a.m. ET) U.S. Markit PMIs for June (preliminary reading).

(10 a.m. ET) U.S. new home sales for May.

With Reuters and The Canadian Press

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