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Equities

Canada’s main stock index rose in early trading with higher commodity prices under pinning energy and mining stocks. On Wall Street, key indexes gained on optimism over growth in the U.S. economy and indications from the Federal Reserve that there was no immediate rush to begin withdrawing stimulus.

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At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 43.27 points, or 0.21 per cent, at 20,273.67.

In the U.S., the Dow Jones Industrial Average rose 55.1 points, or 0.16 per cent, at the open to 34985.99. The S&P 500 rose 2.9 points, or 0.07 per cent, at the open to 4403.59, while the Nasdaq Composite rose 8.6 points, or 0.06 per cent, to 14771.168 at the opening bell.

Both the Dow and S&P 500 were trading at record levels in early going.

On Wednesday afternoon, the Fed made no policy changes and suggested that it still wants to see improvement in labour conditions before considering removing stimulus from the U.S. economy.

“Despite making progress towards tapering, the Fed has a couple of months of inflation and labor data to decide if they can start removing support,” OANDA senior analyst Edward Moya said.

“Given the chorus of pricing pressures announced this earnings season and as employers continue to struggle in finding talent, mission accomplished still seems to be in the distant future.”

Ahead of the open, new figures showed that the U.S. economy grew at an annual rate of 6.5 per cent in the second quarter, a solid clip although also short of the 8.4 per cent economists had been forecasting. Weekly U.S. jobless claims, meanwhile, fell to 400,000, just above the 385,000 markets were expecting.

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On the corporate side, shares of Facebook were down more than 3 per cent in early trading after the social media giant beat quarterly revenue estimates but also cautioned that it expects revenue growth to ‘decelerate significantly.’

Big tech earnings continue after the close with results from Amazon.com Inc.

In this country, Suncor Energy Inc. swung to a profit in the second quarter from a loss a year ago, helped by a rebound in crude prices. The company posted net earnings of $868-million, or 58 cents per share, in the three months ended June 30, compared with a loss of $614-million, or 40 cents per share, year earlier. Suncor shares were down slightly just after the opening bell in Toronto.

Early Thursday, energy earnings continued with results from Cenovus and TC Energy.

Cenovus said net earnings rose to $224-million, or 11 cents per share, in the second quarter ended June 30, from $220-million, or 10 cents per share, in the first quarter.

TC Energy said net income attributable to common shares rose to $982-million, or $1.00 per share, in the three months ended June 30, compared to a loss of $1.06-billion, or $1.11 per share, in the prior quarter.

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Cenovus shares were up 2 per cent in early trading while TC Energy stock was modestly lower.

Overseas, the pan-European STOXX 600 rose 0.49 per cent by midday. Britain’s FTSE 100 gained 0.91 per cent. Germany’s DAX and France’s CAC 40 advanced 0.40 per cent and 0.72 per cent, respectively.

In Asia, Japan’s Nikkei closed up 0.73 per cent. Hong Kong’s Hang Seng rose 3.30 per cent.

Commodities

Crude prices were higher after new figures showed U.S. inventories fell to their lowest level in more than a year last week.

The day range on Brent is US$74.63 to US$75.55. The range on West Texas Intermediate is US$72.26 to US$73.27.

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The U.S. Energy Information Administration says crude inventories fell by 4.1 million barrels to 435.6 million barrels, helped by lower imports and a decline in production. Gasoline inventories were also down. The bigger-than-expected decline in crude inventories put stocks at their lowest level since January 2020.

“Despite all the Delta variant concerns, it seems that the hit to crude demand is minimal thus far,” OANDA’s Edward Moya said.

“Oil prices seem like they still have a one-way ticket higher, needing to wait out the current delta variant jitters for another couple weeks.”

In other commodities, gold saw a third session of gains, helped by weaker U.S. dollar in the wake of the Fed’s latest policy statement.

Spot gold rose 0.6 per cent to US$1,818.50 per ounce. U.S. gold futures climbed 1 per cent to US$1,818.20.

Currencies

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The Canadian dollar was stronger, moving above 80 US cents, as its U.S. counterpart slid against a basket of global currencies after the Fed signalled patience in pulling back stimulus.

The day range on the loonie is 79.76 US cents to 80.33 US cents. In early going, the Canadian dollar managed its best level in two weeks against the U.S. dollar.

“The CAD has picked up around 0.5 per cent against the generally weaker USD overnight, reflecting firmer equity markets and higher commodity prices — but mainly the weaker USD,” Shaun Osborne, chief FX strategist with Scotiabank, said.

There were no major Canadian economic releases due on Thursday. Markets will get a reading on May GDP early Friday.

On world markets, the U.S. dollar index, which weighs the greenback against a selection of currencies, slid 0.3 per cent to 91.98, down for the fourth straight day.

“Leading up to this [Fed] meeting, some wondered whether the September meeting may be ‘live’ for taper, but the statement that progress will continue to be assessed in ‘coming meetings’ (plural) and [Fed chair Jerome] Powell’s commentary in the press conference suggest the likelihood of that is very, very low,” Elsa Lignos, global head of FX strategy, said in an early note.

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The euro, meanwhile, edged up to US$1.188, a two-week high.

The Australian and New Zealand dollars extended gains made on Wednesday, adding more than 0.4 per cent, according to figures from Reuters.

Britain’s pound, which has been surging on optimism over the re-opening of the British economy, touched a one-month peak of US$1.3940.

More company news

Canadian Pacific Railway Ltd reported a 96.2-per-cent rise in quarterly profit on Wednesday, helped in part by strong freight volumes in its coal and automotive segments. Net income rose to $1.25-billion, or $1.86 per share, in the second quarter ended June 30, from $635-million, or 93 cents per share, a year earlier. The results were released after Wednesday’s close.

Ride-hailing company Didi Global on Thursday denied a media report that the company was considering going private to placate Chinese authorities and compensate investor losses since it listed in the United States. The Chinese company has been mulling delisting plans as a crackdown in China widens and it has received support from cybersecurity regulators, the Wall Street Journal reported, citing people familiar with the matter.

Airbus sharply raised its forecasts for full-year deliveries and earnings after reporting better-than-expected half-year results on Thursday. The company said it expected to deliver 600 aircraft in 2021, and doubled its forecast for operating income to 4 billion euros (US$4.7-billion) while predicting 2 billion euros of free cash flow before mergers and acquisitions, and customer financing.

AstraZeneca’s COVID-19 vaccine sales more than tripled to US$894-million in the second quarter from the previous three months. The Anglo-Swedish company has also delayed its application to U.S. authorities for approval of the vaccine to the second half of this year. Previously, AstraZeneca was hoping to file it within the first half.

Ford Motor Co on Wednesday boosted its 2021 profit forecast after reporting better-than-expected quarterly results. Ford raised its full-year operating profit estimate by about US$3.5-billion, to between US$9-billion and US$10-billion. The company released results after Wednesday’s close.

Robinhood will begin offering its stock on Wall Street Thursday, with trading expected to begin on the Nasdaq under the ticker symbol HOOD. It was priced late Wednesday at US$38 a share, the low end of its expected range of US$38 to US$42.

Economic news

(8:30 a.m. ET) U.S. initial jobless claims for week of July 24.

(8:30 a.m. ET) U.S. real GDP for Q2.

(10 a.m. ET) U.S. pending home sales for June.

With Reuters and The Canadian Press

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