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Equities
Canada’s main stock index nudged higher at the open Thursday, helped by gains in tech shares, but still looked set to post a decline for September, ending a seven-month winning streak. Wall Street’s key indexes also advanced at the start of the final trading session of a volatile month.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 20.29 points, or 0.1 per cent, at 20,178.43. The exchange was on track to post a decline for the month of about 2 per cent.
In the U.S., the Dow Jones Industrial Average rose 77.26 points, or 0.22 per cent, at the open to 34,467.98.
The S&P 500 opened higher by 11.21 points, or 0.26 per cent, at 4,370.67, while the Nasdaq Composite gained 70.16 points, or 0.48 per cent, to 14,582.60 at the opening bell. All three went into Thursday’s session headed for monthly declines.
“It looks like investors just want to fast forward past the [U.S.] debt ceiling drama and focus on the global economic recovery that should unfold since Delta variant risks are easing and as worldwide vaccinations continue to improve,” OANDA senior analyst Ed Moya said.
“The global reopening trade was delayed due to Delta, but that should firmly be the theme as supply chain issues improve.”
On Wednesday, Mr. Powell said the central bank faces the task of “resolving” tensions between high inflation and elevated unemployment. However, he also said the Fed’s “hypothesis” is that inflation will largely ease on its own as the global economy returns to normal, suggesting that interest rate hikes remain “a ways off.”
Thursday morning markets will be looking to weekly U.S. jobless claims figures for direction. The U.S. government report showed weekly claims for initial unemployment benefits rose to 362,000, more than the 330,000 economists had been forecasts. At the same time, a revision on broader second-quarter GDP growth came in above earlier estimates at 6.7 per cent.
Markets also continue to keep a close eye on bond yields after a runup in recent days. The yield on the U.S. 10-year note was lower at 1.527 per cent in the early premarket period but steadied to 1.541 per cent about an hour before the North American open.
In this country, banks, federal offices and the bond market are all closed for the National Day of Truth and Reconciliation. The stock market is open.
On the corporate side, Rogers Communication Inc. said chief financial officer Tony Staffieri is leaving after more than a decade in the role. The company said Paulina Molnar, its senior vice president at its Controller and Risk Management division, has been named as interim CFO. Rogers did not give a reason for the transition. The company is currently in the process of buying Shaw Communications.
Overseas, the pan-European STOXX 600 was up 0.23 per cent at midday. Britain’s FTSE 100 rose 0.16 per cent. Germany’s DAX gave up early gains to slide 0.29 per cent. France’s CAC 40 advanced 0.04 per cent.
In Asia, Japan’s Nikkei lost 0.31 per cent. Hong Kong’s Hang Seng slid 0.36 per cent.
Commodities
Crude prices were steady despite rising weekly U.S. inventories and a continued strong U.S. dollar.
The day range on Brent is US$77.66 to US$78.60. The range on West Texas Intermediate is US$74.54 to US$75.39.
“The rally in crude prices could use a break, but right now it doesn’t seem that may be the case,” OANDA’s Ed Moya said. “If WTI crude takes out the summer high of US$76.98, it won’t take much to see US$80 oil.”
Markets appeared to look past the latest U.S. weekly inventory figures from the U.S. Energy Information Administration, which showed oil and fuel stockpiles rose 4.6 million barrels. Analysts polled by Reuters had been expecting a 1.7-million-barrel decline.
In other commodities, gold prices looked set for a second quarterly decline in three quarters.
Spot gold edged up 0.2 per cent to US$1,729.56 per ounce, partially recovering from the Aug. 9 low of US$1,720.49 touched in the previous session. U.S. gold futures were up 0.4 per cent to US$1,729.20.
“Gold remains on thin ice as bearish momentum resumes,” Mr. Moya said.
Currencies
The Canadian dollar was firmer in early going while its U.S. counterpart held near its highest level in a year against a group of world currencies as markets continue to expect the Fed to begin tapering bond purchases in coming months.
The day range on the loonie is 78.34 US cents to 78.68 US cents.
“Overall, the CAD remains on solid ground compared to its major peers and is trading around its highest point since mid-August against the Japanese yen and euro — which don’t have the support of a hawkish central bank,” Shaun Osborne, chief FX strategist with Scotiabank, said.
There were no major Canadian releases due Thursday.
On world markets, the U.S. dollar index - which measures the currency against a basket of six rivals - stood at 94.294, little changed from Wednesday, when it hit 94.435 for the first time since late September last year, according to figures from Reuters.
The U.S. dollar bought 111.91 yen, little changed from Wednesday, when it reached 112.05 for the first time since February 2020. The yen was on track for its worst monthly performance since March.
The euro was mostly flat at US$1.16045, holding near Wednesday’s 14-month low of US$1.15895.
Britain’s pound rose 0.1 per cent to US$1.34357 but remained near the nine-month low of US$1.3412 reached overnight.
More company news
Bombardier Inc said that it received a firm order worth $534-million for 20 units of an upscale variant of its Challenger 350 business jet. The Challenger 3500 jet is expected to enter service in the second half of 2022.
Supply disruptions hampered H&M’s sales in September, the Swedish retailer said on Thursday, after its June-August profits surpassed expectations and pre-pandemic levels. Fiscal third-quarter pretax profit at the world’s second-biggest fashion retailer rose 158% from a year earlier to 6.09 billion Swedish crowns. Analysts polled by Refinitiv had on average forecast a 5.05 billion crown profit.
Merck & Co will buy drugmaker Acceleron Pharma Inc for about $11.5-billion, the companies said on Thursday, as the U.S. pharmaceutical giant looks to beef up its portfolio with drugs for rare diseases. Merck will pay $180 per Acceleron share in cash, representing a premium of about 2.6% to the stock’s closing price on Wednesday, according to Refinitiv data.
Economic news
(8:30 a.m. ET) U.S. jobless claims for week of Sept. 25.
(8:30 a.m. ET) U.S. Real GDP for Q2.
(8:30 a.m. ET) U.S. pre-tax corporate profits for Q2.
(9:45 a.m. ET) U.S. Chicago PMI for September.
With Reuters and The Canadian Press
Terry Weber