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Equities

Canada’s main stock index advanced early Friday, helped by a rise in energy shares. On Wall Street, key indexes were also higher, buoyed by solid corporate earnings.

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At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 65.7 points, or 0.33 per cent, at 20,163.22.

In the U.S., the Dow Jones Industrial Average rose 31.8 points, or 0.09 per cent, at the open to 34855.11. The S&P 500 rose 13.7 points, or 0.31 per cent, at the open to 4381.2, while the Nasdaq Composite rose 68.5 points, or 0.47 per cent, to 14753.058 at the opening bell.

OANDA senior analyst Jeffrey Halley said in a note that “a continuous stream of positive earnings results and fading Delta fears” helped buoy markets in the latter part of the week.

“Beneath the bonnet, though, the quiet rotation back into more defensive 2020 darlings at the expense of growth appears to be continuing,” he said.

Investors will now start turning their attention to the Fed’s policy decision next Wednesday afternoon, looking for signs of the central bank’s next move.

On the corporate side, shares of Twitter were up about 2 per cent after the social media company topped Wall Street’s revenue targets in the most recent quarter. Total revenue rose 74 per cent year-over-year to US$1.19-billion, beating analyst estimates of US$1.07-billion.

In this country, Air Canada posted a loss of $1.16-billion, or $3.31 a share, for the three months ending June 30. That compares with a loss of $1.75-billion ($6.44) for the same quarter a year ago. The carrier also said the rise in travel demand helped slash its cash burn to $8-million a day, better than earlier projections of $13- to $15-million. The Globe’s Eric Atkins reports that the carrier also reported a resurgence in ticket sales as vaccination rates rise.

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Air Canada shares posted modest gains shortly after the opening bell in Toronto.

Elsewhere, Canadian auto parts giant Magna International Inc agreed to buy Swedish rival Veoneer Inc for about US$3.8-billion in cash. The boards of both companies have approved the deal, which is expected to close by the end of this year.

Magna stock fell more than 4 per cent in Toronto. Veoneer shares spiked more than 50 per cent in early trading in New York.

Overseas, Britain’s FTSE 100 was up 0.80 per cent by midday. Germany’s DAX gained 0.95 per cent while France’s CAC 40 rose 1.04 per cent. The pan-European STOXX 600 rose 0.90 per cent.

In Asia, Hong Kong’s Hang Seng ended down 1.45 per cent. Markets in Japan were closed.

Commodities

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Crude prices wavered early Friday but looked set for a relatively flat week as expectations of tight supply continue to underpin prices.

The day range on Brent is US$73.32 to US$73.86. The range on West Texas Intermediate is US$71.46 to US$71.96.

Both benchmarks gained more than 2 per cent on Thursday, continuing the recovery after Monday’s sharp selloff in the wake of a fresh OPEC+ supply deal and rising concerns about the potential impact of the spread of the Delta variant. Both Brent and WTI looked set to finish out the week flat.

“Gone is the ‘delta-dismay’ of Monday’s speculative-long capitulation, and in with the fear of missing out on the next rally,” OANDA’s Jeffrey Halley said.

“As I have stated previously, I felt any sell-off would be short in duration, but I will admit oil’s comeback has surprised me and highlights that tail-chasing fast money is what is driving oil prices right now.”

In other commodities, gold moved in a narrow range and looked set for a decline on the week.

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Spot gold fell 0.2 per cent to US$1,803.66 an ounce. U.S. gold futures were flat at US$1,805.30.

Gold is down 0.2 per cent this week after hitting its lowest in more than a week on Thursday.

Currencies

The Canadian dollar was little changed in early going as the U.S. dollar looked set for a weekly advance against a group of world currencies.

The day range on the loonie is 79.49 US cents to 79.65 US cents.

Ahead of the open, Canadian investors got a reading on retail sales from Statistics Canada. In May, sales fell 2.1 per cent, less that a previous estimate from the government agency. Extended lockdowns aimed at curbing the spread of COVID-19 weighed on sales. However, Statscan’s early estimate on June sales suggest a rebound of 4.4 per cent as restrictions eased.

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“The third wave hit retail sales hard, but the early indications are that Canadian consumers were champing at the bit to get back to the mall with a solid rebound in June activity,” Benjamin Reitzes, director, Canadian rates and macro strategist with Bank of Montreal, said. “Look for sales to continue to climb through the summer months.”

On world markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, was up 0.2 per cent for the week, rising slightly on Friday to stand at 92.891, according to figures from Reuters.

The safe-harbour yen weakened about 0.2 per cent for the week and last traded at 110.36.

Meanwhile, the euro traded flat at US$1.1772. The British pound recovered from losses as steep as 1.3 per cent for the week to trade just about flat at US$1.3741, Reuters reports.

More company news

Snap Inc beat analysts’ estimates for user and quarterly revenue growth and notched the highest growth rates since late 2017, as new features on its messaging app Snapchat attracted more users. Daily active users rose 23 per cent to 293 million during the second quarter ended June 30, beating Wall Street estimates of 290.3 million, according to IBES data from Refinitiv. Snap’s revenue jumped 116 per cent to US$982-million, beating analyst targets of US$845.9-million. Previously, the company’s strongest growth rate was 66 per cent.

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Intel Corp forecast third-quarter revenue above analysts’ estimates, as the chipmaker focuses on in-house manufacturing to meet increased demand for its new generation of processors. The company expects adjusted third-quarter revenue of about US$18.2-billion, compared with estimates of US$18.09-billion, according to IBES data from Refinitiv.

American Express Co beat estimates for second-quarter profit on Friday as increased consumer spending and an improving economy prompted it to release more funds from its loan-loss reserves. Net income rose to US$2.28-billion, or US$2.08 per share, for the quarter ended June 30 from US$257-million, or 29 US cents per share, a year earlier. Analysts had expected $1.67 per share, according to Refinitiv IBES data.

Brookfield Infrastructure Partners said on Friday proxy advisory company Glass Lewis has backed Brookfield’s offer for Inter Pipeline Ltd over a rival bid from Pembina Pipeline Corp. This follows days after support for Brookfield’s bid from proxy advisory firm Institutional Shareholder Services (ISS).

Economic news

830 a.m. (ET) Canada retail sales for May.

945 a.m. (ET) U.S. Markit PMIs for July.

With Reuters and The Canadian Press

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