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Equities
Canada’s main stock index fell early Wednesday as faltering risk sentiment swept through global markets. Major U.S. indexes were also down at the open as inflation and rate concerns continue to temper investor enthusiasm.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 91.89 points, or 0.46 per cent, at 20,091.54.
In the U.S., the Dow Jones Industrial Average fell 115.71 points, or 0.34 per cent, at the open to 34,198.96.
The S&P 500 opened lower by 26.15 points, or 0.60 per cent, at 4,319.57, while the Nasdaq Composite dropped 144.38 points, or 1.00 per cent, to 14,289.45 at the opening bell.
“The choppy week continues as markets continue to chase their tails in a light data week ahead of Friday’s U.S. non-farm payrolls main event,” OANDA senior analyst Jeffrey Halley said in a note. “[On Tuesday], firmer services PMI data across Europe and from the U.S. was enough to flush out the buy-the-dippers in equity markets, which ignored a torrid Asian session and posted strong gains.”
Sentiment took a hit early Wednesday as bond yields shift back toward highs seen last week. Shortly after the North American open, the yield on the 10-year note was down slightly at 1.514 per cent. As well, a recent jump in crude prices to multiyear highs has again raised concerns that higher inflation could force central banks to move faster than expected on tightening monetary policy.
On Wall Street, investors also got a better-than-forecast reading on September hiring ahead of Friday’s highly anticipated non-farm payrolls report. Payroll processing firm ADP said hiring by private U.S. companies rose by 568,000 positions last month. That was better than the 425,000 economists had been expecting.
On the corporate side, earnings are due from Constellation Brands and Levi Strauss.
In this country, The Globe’s Niall McGee reports that the world’s biggest mining companies, including Canada’s Barrick Gold Corp. and Teck Resources Ltd., are collectively committing to cut their emissions to net zero by 2050, as they face increasing pressure from investors and environmentalists to mine metals responsibly. Net zero means companies either emit no greenhouse gases, or offset their emissions by removing a corresponding amount of carbon dioxide from the atmosphere.
Overseas, the pan-European STOXX 600 sank 1.67 per cent at midday. Britain’s FTSE 100 dropped 1.53 per cent. Germany’s DAX and France’s CAC 40 were both off nearly 2 per cent.
In Asia, Japan’s Nikkei closed down 1.05 per cent. Hong Kong’s Hang Seng slid 0.57 per cent.’
Commodities
Crude prices pulled back in early going after new U.S. figures showed a rise in inventories but still traded near multiyear highs.
The day range on Brent is US$82.17 to US$83.47. The range on West Texas Intermediate is US$78.46 to US$79.78. Early in the session, Brent touched its highest level since 2018 while WTI managed its best since 2018 before declining somewhat as the session progressed.
Prices, which have been supported through the week by a decision by OPEC+ to maintain its current production plan, came under some pressure after the American Petroleum Institute reported a 951,000 decline in weekly crude stocks. Gasoline and distillate inventories were also up for the week.
More official figures are due later Wednesday morning from the U.S. Energy Information Administration.
In other commodities, gold prices extended losses, hit by a jump in the U.S. dollar and U.S. Treasury yields
Spot gold fell 0.5 per cent to US$1,750.51 per ounce, while U.S. gold futures were 0.7 per cent lower at US$1,749.40.
Currencies
The Canadian dollar was weaker, pulling back from its best level in a month, as its U.S. counterpart edged up against global rivals on rising inflation concerns.
The day range on the loonie is 79.07 US cents to 79.53 US cents.
There were no major Canadian releases on Wednesday’s calendar.
On global markets, the euro traded below US$1.16 and last bought US$1.1567, slightly higher than the 14-month low of US$1.1563 seen last week, according to figures from Reuters.
The yen fell to a one-week low of 111.79 per dollar alongside a rise in Treasury yields. It was within range of the 18-month trough of 112.08 that it visited last Thursday.
Britain’s pound recouped some of last week’s losses against the U.S. dollar, but lost momentum through the Asian session and it fell 0.4 per cent to US$1.3570 and held just below Tuesday’s three-week peak on the euro.
More company news
Southwest Gas Holdings Inc said it has agreed to buy Questar Pipelines from Dominion Energy for $1.975-billion, hours after activist investor Carl Icahn made public his objections to it. For Southwest Gas, paying $1.545-billion in cash and assuming $430-million of debt, the acquisition marks a northward expansion of its operations and boosts its regulated business.
Economic news
(8:15 a.m. ET) U.S. ADP National Employment Report for September.
With Reuters and The Canadian Press
Terry Weber