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Equities

Canada’s main stock index opened up on Thursday, buoyed by improving global sentiment. On Wall Street, key indexes were also higher on a relief rally sparked by signs of progress in a deal to resolve a impasse over the U.S. debt ceiling.

At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 131.11 points, or 0.65 per cent, at 20,322.77.

In the U.S., the Dow Jones Industrial Average rose 92.73 points, or 0.27%, at the open to 34,509.72.

The S&P 500 opened higher by 20.18 points, or 0.46%, at 4,383.73, while the Nasdaq Composite gained 129.89 points, or 0.90%, to 14,631.80 at the opening bell.

“It is too early to say that the run lower is at an end, and with non-farm payrolls tomorrow and earnings season next week there is still plenty of scope for volatility, but the key worry [over the U.S. debt ceiling] for investors appears to have been dealt with for the time being,” IG chief market analyst Chris Beauchamp said.

On Wednesday, Senate Minority Leader Mitch McConnel offered a temporary extension to the federal U.S. debt ceiling into December, averting a default and resulting economic fallout.

On Thursday, markets got a better-than-expected reading on weekly U.S. jobless claims. The report said 326,000 Americans filed for initial unemployment benefits last week. Economists had been expecting a number closer to 348,000. The new figures come a day before the release of the highly anticipated September non-farm payrolls report.

A day earlier, payroll processor ADP said private hiring in September rose by 568,000 in the United States, better than economists had been forecasting.

In this country, Bank of Canada Governor Tiff Macklem is due to speak at midday via videoconference to the Council on Foreign Relations. The topic for the speech is ‘global financial architecture.’

On the corporate side, Canadian cannabis company Tilray reported a 43-per-cent rise in first quarter revenue on strong demand.

Tilray, which completed its merger with Aphria this spring, said its revenue rose to $168-million in the quarter ended Aug. 31 from $117.49-million a year earlier. Net cannabis revenue was up 38 per cent. Tilray’s net loss widened to $34.6-million in the first quarter from $21.74-million on higher expenses. Tilray shares were down in early trading in Toronto but steadied as the morning progressed.

Earlier this year, Tilray, as part cost cutting since its merger this spring with Aphria Inc., announced it will shut down an indoor growing facility in Nanaimo, B.C., a 60,000 square-foot space that was designed to produce pot primarily for the medical market.

Overseas, the pan-European STOXX 600 was up 1.29 per cent by midday. Britain’s FTSE 100 gained 1.10 per cent. Germany’s DAX rose 1.41 per cent and France’s CAC 40 advanced 1.10 per cent.

In Asia, Japan’s Nikkei ended up 0.54 per cent. Hong Kong’s Hang Seng surged 3.07 per cent.

Commodities

Crude prices extended their retreat from recent multiyear highs after new figures showed a surprise build in weekly U.S. inventories.

The day range on Brent is US$79.08 to US$81.14. The range on West Texas Intermediate is US$74.96 to US$77.23.

Thursday’s declines marked the second straight sessions of losses after a recent runup in prices, although both remain higher on the week so far.

The U.S. Energy Information Administration said U.S. crude inventories rose by 2.3 million barrels last week. Markets had been expecting a decline of more than 400,000 barrels. Gasoline inventories also rose, while distillate inventories were down modestly.

OANDA senior analyst Jeffrey Halley said the latest report suggests that U.S. production is now back on track after Hurricane Ida.

“That was enough to spark a sell-off by oil which was already heavily long,” he said.

In other commodities, gold prices slid and traded in a tight range.

Spot gold was down 0.2 per cent at US$1,759.31 an ounce while U.S. gold futures were little changed at US$1,761.20.

“Despite gold seemingly slipping off the radar, its refusal to retreat in the face of firm U.S. yields, a continuing rally by the U.S. dollar and short-term exuberance in the equity market, is telling,” Mr. Halley said.

“Gold’s refusal to roll over in the face of usually bearish headwinds suggests that nervous investors are continuing to quietly hedge risks via long gold positions.”

Currencies

The Canadian dollar was steady while its U.S. counterpart was little changed against a basket of currencies.

The day range on the loonie is 79.36 US cents to 79.61 US cents.

Investors will get remarks from Bank of Canada Governor Tiff Macklem, although the topic of the speech isn’t seen as market moving.

“The topic of his address likely means it will have limited impact on the Canadian dollar,” Shaun Osborne, chief FX strategist with Bank of Nova Scotia, said. “The appearance is followed by a Q&A with media, however, that may provide some insight into the bank’s tapering plans and rate hikes in 2022. On the other hand, Gov Macklem may keep his cards close to his chest so as to not get ahead of the bank’s Monetary Policy Report due for publication with the October 27 policy decision.”

On world markets, the U.S. dollar index, which measures the greenback against a basket of six other major currencies, was little changed at 94.153 following a nearly 0.5-per-cent rise over the past two sessions, according to figures from Reuters.

The U.S. dollar was near a 14-month high against the euro. The greenback was slightly lower at US$1.1563 per euro after strengthening to US$1.1529 on Wednesday for the first time since July 2020.

The Japanese yen edged higher at 111.29 per U.S. dollar, near the middle of its range of the past week and a half.

In bonds, the yield on the U.S. 10-year note was up slightly at 1.529 per cent in the predawn period.

More company news

Montreal-based travel company Transat A.T. Inc. has named Patrick Bui as its new chief financial officer. Mr. Bui will assume his new role on November 15. Mr. Bui served most recently as Chief Financial Officer for Kruger Energy, a renewable-energy producer with operations throughout the Americas. He takes over from Jacques Simoneau, who has been filling the post on an interim basis.

Royal Dutch Shell warned on Thursday of a $400-million hit to third-quarter earnings from the damage caused by August’s Hurricane Ida. However, in an update ahead of quarterly results this month, the oil major also flagged a boost to cashflows from soaring natural gas and electricity prices.

Levi Strauss & Co beat quarterly revenue estimates, boosted by an uptick in demand for jeans as people resuming their social life spent on a wardrobe refresh. Net revenue rose to $1.50-billion in the third quarter from $1.06-billion a year earlier. Analysts on average had expected revenue of $1.48-billion, according to IBES data from Refinitiv.

The Dutch antitrust authority has found that Apple’s rules requiring software developers to use its in-app payment system are anti-competitive and ordered it to make changes, four people familiar with the matter told Reuters, in the latest regulatory setback for the iPhone maker. Apple’s app-store payment policies, in particular its requirement that app developers exclusively use its payment system where commissions range between 15% and 30%, have long drawn complaints from developers.

Economic news

(8:30 a.m. ET) U.S. initial jobless claims for week of Oct. 2.

(10 a.m. ET) Canada’s Ivey PMI for September.

(12 p.m. ET) Bank of Canada Governor Tiff Macklem speaks on global financial architecture to the Council on Foreign Relations (videoconference)

(3 p.m. ET) U.S. consumer credit for August.

With Reuters and The Canadian Press

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