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Equities

Canada’s main stock index opened higher Friday buoyed by rising energy shares on the back of higher crude prices. On Wall Street, key indexes also gained as investors await remarks from Federal Reserve chair Jerome Powell.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 53.36 points, or 0.26 per cent, at 20,557.51.

Energy shares gained more than 2 per cent in early trading in Toronto as crude prices headed toward a solid weekly advance.

In the U.S., the Dow Jones Industrial Average rose 18.0 points, or 0.05 per cent, at the open to 35231.11. The S&P 500 rose 4.1 points, or 0.09 per cent, at the open to 4474.1, while the Nasdaq Composite rose 24.0 points, or 0.16 per cent, to 14969.765 at the opening bell.

Friday morning, Mr. Powell will address the Fed’s Jackson Hole symposium. Investors are hoping for some clarity on the central bank’s plan to taper bond purchases as the economy recovers, although some analysts were skeptical that the speech would live up to expectations. Some have suggested the Fed will likely want to see next week’s August employment figures before moving forward.

“The way Treasury yields have been rising, Wall Street is expecting Powell to imply that tapering in September is likely, but refrain on giving any other hints with the timing and speed of the actual taper,” OANDA senior analyst Ed Moya said.

“Powell wants to avoid a communication mistake like he had in December 2018 when he said tightening would be on autopilot. Powell could show more anxiety over inflation and that might help trigger a quicker removal of accommodation.”

Mr. Powell is set to speak at 10 a.m. ET.

On the corporate side, shares of retailer Gap Inc. were up 7 per cent in morning trading after the company raised its full-year net sales forecast for the second time, hoping to capitalize on increased demand as pandemic restrictions ease. Gap also raised its annual profit forecast. The company’s latest results were released after Thursday’s close.

In this country, investors got results from CWB Financial Group. On an adjusted basis, CWB says it earned $1.01 per share for the quarter compared with an adjusted profit of 74 cents per share a year ago. Analysts on average had expected a profit of 89 cents per share, according financial market data firm Refinitiv.

Through the week, Canada’s biggest banks all released third-quarter results that topped analysts’ profit forecasts as they reversed provisions set aside to cover potential credit losses.

Overseas, the pan-European STOXX 600 was down 0.12 per cent by midday. Britain’s FTSE 100 slid 0.23 per cent. Germany’s DAX and France’s CAC 40 were off 0.13 per cent and 0.22 per cent, respectively.

In Asia, Japan’s Nikkei slid 0.36 per cent. Hong Kong’s Hang Seng finished down 0.03 per cent.

Commodities

Crude prices were higher and headed for solid weekly gains as concerns about weather-related supply disruptions in the Gulf of Mexico underpin prices.

The day range on Brent is US$70.23 to US$71.39. The range on West Texas Intermediate is US$67.52 to US$68.76.

Brent is on track for a weekly gain of about 10 per cent, it’s biggest in more than a year. WTI looks set for a weekly rise of about 9 per cent.

Reuters reports that companies began airlifting workers from Gulf of Mexico oil production platforms on Thursday and BHP and BP said they had begun to stop production at offshore platforms as a storm brewing in the Caribbean Sea was forecast to barrel through the Gulf on the weekend.

Gulf of Mexico offshore wells account for 17 per cent of U.S. crude oil production.

“WTI crude will likely start to hover around the $68 level until OPEC+ signals what they will be doing with production next month and whether Gulf of Mexico production gets disrupted as tropical activity picks up,” OANDA’s Ed Moya said in a note.

“A big question for energy traders remains what will happen with Iran sanctions and if they are lifted how much crude could rush back to the market.”

In other commodities, gold prices gained, trading above US$1,800 an ounce.

Spot gold rose 0.6 per cent to $1,802.39 per ounce. So far, gold prices have risen about 1.3 per cent for the week.

U.S. gold futures rose 0.7 per cent to US$1,807.00.

Currencies

The Canadian dollar was trading near the 79-US-cent mark as its U.S. counterpart held steady against world currencies ahead of Mr. Powell’s remarks.

The day range on the loonie is 78.69 US cents to 79.02 US cents.

“The CAD is a moderate out-performer this morning, reflecting the bid for WTI — up nearly a dollar on the day — as Tropical Storm Ida crimps US Gulf output,” Shaun Osborne, chief FX strategist with Scotiabank, said.

On world markets, the U.S. dollar index, which weighs the greenback against a group of global currencies, was little changed, exchanging hands at 93.046.

The euro and Britain’s pound were also little changed at US$1.1754 and US$1.3702, according to figures from Reuters.

The New Zealand dollar dipped slightly after Prime Minister Jacinda Ardern said a COVID-19 lockdown in Auckland is likely to remain in place for another two weeks.

More company news

Apple Inc said it had reached a proposed settlement on a class-action lawsuit brought by small developers on its App Store and would make changes to its business as a result. A group of software developers brought the lawsuit in 2019, alleging that Apple broke antitrust laws with practices such as charging commissions of up to 30 per cent. The company said it has reached a proposed settlement that covers developers who made $1-million a year or less under which the developers release all claims that Apple’s commissions were too high. In exchange, Apple said it will make a number of changes to the App Store, including preserving a change made last year that lowers commissions for smaller developers to 15 per cent.

Peloton Interactive Inc said the U.S. Department of Justice and the Department of Homeland Security had subpoenaed the company for documents and other information related to reporting of injuries associated with its products. On Thursday, the company lowered the price of its exercise bike and said its near-term profitability would take a hit due to the pricing change and higher costs.

Economic news

(8:30 a.m. ET) Canada’s industrial product price index for July.

(8:30 a.m. ET) Canada’s raw materials price index for July.

(8:30 a.m. ET) U.S. personal spending and income for July.

(8:30 a.m. ET) U.S. core PCE price index for July.

(8:30 a.m. ET) U.S. goods trade deficit for July.

(8:30 a.m. ET) U.S. wholesale and retail inventories for July.

(10 a.m. ET) U.S. University of Michigan consumer sentiment for August.

(10 a.m. ET) U.S. Fed Chair Jerome Powell delivers remarks at the Jackson Hole Symposium.

With Reuters and The Canadian Press

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