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Equities

Canada’s main stock index traded higher early Thursday, holding in record territory, helped by rising energy prices. On Wall Street, stocks were positive with the Nasdaq also at a fresh peak as investors await Friday’s U.S. jobs report.

At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 71.6 points, or 0.35 per cent, at 20,761.18.

In the U.S., the Dow Jones Industrial Average rose 40.5 points, or 0.11 per cent, at the open to 35,353.06. The S&P 500 rose 10.4 points, or 0.23 per cent, at the open to 4,534.48, while the Nasdaq Composite rose 49.1 points, or 0.32 per cent, to 15,358.474 at the opening bell.

Investors are now waiting for the latest reading on hiring in the U.S. economy, with the release Friday of the August nonfarm payroll figures. Economists are expecting to see the creation of about 750,000 jobs for the month, although forecasts range fairly widely. On Wednesday, ADP’s report on private hiring during the month came in short of forecasts, raising concerns that the Friday report could also come in softer than expected.

“With the various unemployment and stimulus benefits coming to an end this month, we should see hiring start to accelerate during September, even if tomorrow’s jobs report is disappointing,” Michael Hewson, chief market analyst with CMC Markets U.K., said.

“Even if it isn’t, attention will soon shift to this month’s Fed meeting, in terms of a timeline towards a reduction in the monthly asset purchase program. A poor report won’t change the likelihood of a tapering of purchases, but it will affect the pace, timing and scope of one.”

Before Thursday’s open, markets got a slightly better-than-forecast reading on weekly jobless claims. The U.S. Labor Department said initial claims for state unemployment benefits totalled 340,000 last week. That was down 14,000 from the prior week. Economists had been forecasting a number closer to 346,000.

In this country, investors got July international trade numbers. Statistics Canada said Canada’s trade surplus narrowed to $778-million in July from $2.6-billion a month earlier. Imports rose 4.2 per cent while exports increased 0.6 per cent.

On the corporate side, Quebec-based Ski-Doo maker BRP reported results before the start of trading.

The company reported a second-quarter profit of $212.9-million or $2.46 per diluted share, up from $126.1-million or $1.43 a year ago, and raised its profit guidance for the year. BRP also updated its revenue guidance to forecast an overall increase between 27 and 35 per cent compared with its earlier expectation for a gain of between 28 and 33 per cent.

BRP shares jumped nearly 9 per cent in early trading in Toronto.

Overseas, the pan European STOXX 600 gained 0.19 per cent by midday.

Britain’s FTSE 100 slid 0.10 per cent. Germany’s DAX and France’s CAC 40 were up 0.01 per cent and 0.05 per cent, respectively.

In Asia, Japan’s Nikkei finished up 0.33 per cent. Hong Kong’s Hang Seng gained 0.24 per cent.

Commodities

Crude prices rose following a decision by OPEC and its allies to continue with their plan to slowly return supply to the market.

The day range on Brent is US$70.92 to US$71.88. The range on West Texas Intermediate is US$67.84 to US$68.86.

The Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia agreed on Wednesday to continue a policy of phasing out record production curbs by adding 400,000 barrels a day (bpd) each month through the rest of the year.

“This was a rare easy meeting for OPEC+ that did not even last half an hour,” OANDA senior analyst Ed Moya said.

“The oil market will stay in deficit for the rest of the year with 2021 oil demand growth at 6 million barrels a day. The Joint Ministerial Monitoring Committee anticipates the 2022 oil market in 2.5 million bpd surplus, which will likely prevent any price surges from getting out of control.”

Sentiment was underpinned by the latest weekly inventory figures from the U.S. Energy Information Administration, which showed crude stocks fell by 7.2 million barrels last week, far more than markets had been expecting.

In other commodities, gold prices were little changed.

Spot gold was steady at US$1,814.58 per ounce, while U.S. gold futures traded flat at US$1,816.50.

“Market is waiting for the payrolls data to be released to get a bit of a guide on how ultimately inflation expectations will be set,” ANZ analyst Daniel Hynes said.

Currencies

The Canadian dollar was slightly firmer as its U.S. counterpart held near four-week lows against a basket of world currencies.

The day range on the loonie is 79.12 US cents to 79.45 US cents.

On world markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, was marginally weaker at 92.452, not far off a four-week low of 92.376 touched in the previous session, according to figures from Reuters.

The euro traded just off one-month highs of US$1.1857, buoyed by data showing inflation rose 3 per cent year on year in August.

Currency moves were subdued ahead of Friday’s U.S. employment report, with the yen at 110.00 per U.S. dollar and the Australian dollar at a two-week high of US$0.73890.

“FX has barely moved in overnight markets, as ranges tighten ahead of tomorrow’s US payrolls report,” RBC chief currency strategist Adam Cole said in an early note.

The New Zealand dollar hit a one-month high of US$0.7084.

More company news

The Globe’s James Bradshaw reports Canadian Imperial Bank of Commerce and retail giant Costco have struck a multi-year deal that will make CIBC the sole issuer of Costco-branded Mastercards in Canada starting next year. CIBC announced Thursday that it is acquiring Costco’s existing credit card portfolio in Canada, as U.S.-based lender Capital One, which previously issued the cards, pulls out of its partnership with the retailer. CIBC said in a news release that Costco has millions of current card holders in Canada, but declined to provide an exact number.

The U.S. Justice Department is readying a second monopoly lawsuit against Alphabet Inc-owned Google over the internet search giant’s digital advertising business, Bloomberg News reported, citing a person familiar with the matter. The Justice Department sued Google in October, accusing the $1-trillion company of illegally using its market muscle to hobble rivals. A trial was set for September 2023.

Apple Inc further loosened App Store rules, allowing some content companies like Netflix Inc to provide links to their websites so customers can sign up for paid accounts. The concession was part of a settlement with Japan’s anti-trust regulator, which said the change was enough for it to close a five-year investigation into Apple that focused on video and music apps but did not consider games.

American Eagle Outfitters Inc missed quarterly revenue estimates on Thursday, hurt by a slowdown in its online business as people shop more at physical stores following vaccination drives and easing of coronavirus curbs. Total net revenue jumped to US$1.19-billion from US$883.5-million a year earlier, missing analysts’ average estimate of US$1.23-billion, according to Refinitiv IBES.

Economic news

(830 am ET) Canada merchandise trade balance for July.

(830 am ET) Canada building permits for July.

(830 am ET) U.S. initial jobless claims.

(830 am ET) U.S. productivity and unit labour costs.

(830 am ET) U.S. goods and services trade deficit.

(10 am ET) U.S. factory orders.

With Reuters and The Canadian Press

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