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Equities
Canada’s main stock index opened higher Friday, helped by rising crude prices and a positive reading on the country’s job market. On Wall Street, key indexes gained in early trading amid signs of easing tensions between the United States and China.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 35.81 points, or 0.17 per cent, at 20,741.08.
In the U.S., the Dow Jones Industrial Average rose 70.21 points, or 0.20 per cent, at the open to 34,949.59.
The S&P 500 opened higher by 13.64 points, or 0.30 per cent, at 4,506.92, while the Nasdaq Composite gained 84.66 points, or 0.56 per cent, to 15,332.92 at the opening bell.
Sentiment got a boost on news that U.S. President Joe Biden and his Chinese counterpart Xi Jinping spoke for 90 minutes in their first talks in seven months on Thursday, sparking hopes of thawing relations between the two nations.
In this country, investors got a better-than-expected reading on hiring in August.
Statistics Canada says the Canadian economy added 90,000 new jobs last month, marking the third consecutive month of jobs gains. Economists had been expecting a gain, but most were looking for a smaller increase. The unemployment rate fell 0.4 percentage points to 7.1 per cent.
“Summertime in Canada showed again just how strong the labour market can be when there’s a lull in COVID cases,” CIBC senior economist Royce Mendes.
“The economy created another 90K jobs in August, which topped consensus expectations and came after even stronger gains in the prior two months. The easing of restrictions continued to allow for more employment in services sectors. Most of the hiring showed up in the private sector and were for full-time jobs.”
However, he also noted that there were a few weaker spots in the report, He said hours worked were essentially unchanged and the participation rate fell.
In a speech Thursday, Bank of Canada Governor Tiff Macklem said the central bank expects to start raising interest rates before entirely winding down its bond buying program. The Globe’s Mark Rendell reports Mr. Macklem said the bank is approaching the “reinvestment phase” of its federal government bond purchase program, also known as quantitative easing, or QE. Since the start of the pandemic, the bank has been buying billions of dollars worth of government bonds every week in an attempt to lower yields on benchmark bonds and bring down borrowing costs across the economy.
On the corporate side, investors got results from retailer Roots before the start of trading.
The company posted total quarterly sales of $38.9-million, up from $38.2-million a year earlier. Roots reported a quarterly loss per share of 3 cents, compared with a loss of 4 cents a share a year earlier. On an adjusted basis, the company posted a loss of 1 cent a share in the most recent quarter.
Roots shares were up more than 3 per cent in early trading in Toronto.
Overseas, the pan-European STOXX 600 rose 0.24 per cent by midday, although it still looked set to mark a losing week. Britain’s FTSE 100 rose 0.36 per cent. Germany’s DAX gained 0.36 per cent. France’s CAC 40 rose 0.27 per cent.
In Asia, Japan’s Nikkei finished up 1.25 per cent. Hong Kong’s Hang Seng jumped 1.91 per cent.
Commodities
Crude prices gained alongside improved global sentiment and a drop in weekly crude inventories.
The day range on Brent is US$70.94 to US$72.81. The range on West Texas Intermediate is US$67.68 to US$69.40. Brent looks set for a modest gain on the week.
The U.S. Energy Information Administration reported Thursday that crude stockpiles fell by 1.5 million barrels last week, lower than markets had been forecasting. Gasoline inventories, however, declined by a bigger-than-expected 7.2 million barrels.
Meanwhile, news of a call between U.S. President Joe Biden and his Chinese counterpart Xi Jinping helped boost optimism over improved trade relations between the two countries. It also helped offset the impact of China saying it would release crude oil reserves via public auction to help ease high feedstock costs for refiners. That report sent crude prices sharply lower on Thursday.
“Oil prices continue to trade in a choppy but ultimately range-trading manner,” OANDA senior analyst Jeffrey Halley said in an early note. “News that China was releasing some strategic oil reserves into domestic markets put the bears in the ascendancy.”
In other commodities, gold prices edged up as the U.S. dollar eased slightly.
Spot gold rose 0.3 per cent to US$1,800.47 per ounce. U.S. gold futures were up 0.2 per cent at US$1,804.00.
Currencies
The Canadian dollar was higher in early going on improved risk sentiment while its U.S. counterpart slid against a group of world currencies.
The day range on the loonie is 78.90 US cents to 79.42 US cents.
The Canadian dollar held early gains after the release of the August employment numbers.
On world markets, the U.S. dollar index, which measures the greenback against six global currencies, was down 0.1 per cent on the day at 92.421, although still on course for a 0.35 per cent weekly rise, according to figures from Reuters.
The Australian dollar rose 0.35 per cent to US$0.7392, but was heading for a 0.7-per-cent decline this week. The New Zealand dollar gained nearly half a percent to US$0.7141.
The Japanese yen lost 0.2 per cent against the U.S. dollar to 109.97 yen while still moving in the middle of its range of the past two months.
More company news
Lundin Mining Corp. says president and chief executive officer Marie Inkster has informed the company’s board that she will be stepping down as of Dec. 31, 2021, for personal reasons. Peter Rockandel will take over the job on Jan. 1, 2022.
Kroger Co said on it expected a smaller decline in annual same-store sales as nerves around this summer’s surge in coronavirus infections kept Americans stocking up on groceries. The U.S. grocer estimated a 1% to 1.5% fall in adjusted same-store sales, compared with a previous forecast of a decline between 2.5% and 4%. Analysts on average expect same-store sales to decline 2.9%, according to Refinitiv data.
Economic news
(830 am ET) Canada employment report for August.
(830 am ET) Canada capacity utilization for the second quarter.
(830 am ET) Canada national balance sheet and financial flow accounts data for the second quarter.
(830 am ET) U.S. producer price index final demand.
(830 am ET) U.S. wholesale trade.
With Reuters and The Canadian Press
Terry Weber