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Canada’s main stock index hit a one-month high on Thursday, as Canopy Growth Corp led gains in healthcare stocks and stronger commodities lifted energy and mining shares. On Wall Street, main indexes rallied as a surge in technology stocks and strong quarterly results helped investors to look away from inflation concerns.

In early trading, the Toronto Stock Exchange’s S&P/TSX composite index was up 142.24 points, or 0.69%, at 20,760.71, helped by healthcare and energy stocks.

Canada’s Canopy Growth Corp rose 3.6% after saying it would buy weed gummies maker Wana Brands for $297.5 million, as the world’s biggest pot producer looks to expand in the U.S. cannabis market.

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The energy index rose 1.5%, touching it highest level since Jan. 2019 as crude prices jumped over 1%.

The materials sector, which includes precious and base metals miners, and fertilizer companies, added 0.9% as gold prices hit a one-month high on dollar strength and an easing in U.S. bond yields.

In the U.S. stock market, the biggest boost came from growth names including Facebook Inc, Microsoft Corp, Amazon.com Inc, Tesla Inc, Apple Inc and Google-parent Alphabet, which rose more than 1%.

Bank of America BAC.N gained 1.3% as its profit topped market expectations, helped by the release of reserves to cover loan losses.

UnitedHealth Group Inc jumped about 5% to top the S&P 500 and the Dow, after the health insurer raised its full-year adjusted profit forecast on strength from its Optum unit that manages drug benefits. (Full Story)

“Heading into this third quarter reporting period, the market was experiencing weakness ... a lot of analysts were worried that earnings might end up disappointing,” said Sam Stovall, chief investment strategist at CFRA.

“This could be the buy the dip, we are in the beginning of what is traditionally a seasonally favorable period for the market. We could end up with a nice run between now and the end of the year.”

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Analysts expect corporate America to report strong quarterly profit growth and will focus on commentary from companies on how they are going to battle rising costs, labor shortages and supply chain disruptions.

Meanwhile, data showed the number of Americans filing new claims for unemployment benefits fell close to a 19-month low last week, while a separate report showed producer prices accelerated 8.6% in the 12 months through September.

The reports come a day after consumer prices rose solidly in September, which further strengthened case for a interest-rate hike by the Federal Reserve.

St. Louis Fed Bank President James Bullard said his outlook for U.S. economy is pretty bullish, while putting a 50% chance on high levels of inflation persisting.

In morning trade, the Dow Jones Industrial Average was up 385.38 points, or 1.12%, at 34,763.19, the S&P 500 was up 54.02 points, or 1.24%, at 4,417.82, and the Nasdaq Composite was up 198.90 points, or 1.36%, at 14,770.53.

All of the 11 major S&P sectors advanced in early trading, with healthcare and technology leading the gains.

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Commodities

Oil prices are up about 1% so far today after the International Energy Agency said that record natural gas prices will boost demand for oil and top oil producer Saudi Arabia dismissed calls for additional OPEC+ supplies.

Brent crude futures gained 87 cents, or 1.1%, to $84.05 a barrel by 1010 GMT after falling 0.3% on Wednesday. U.S. West Texas Intermediate (WTI) crude futures climbed 77 cents, or 1%, to $81.21, more than recouping the previous day’s 0.3% decline.

Oil demand is set to jump by half a million barrels per day (bpd) as the power sector and heavy industries switch from other more expensive sources of energy, the IEA said, warning that the energy crunch could stoke inflation and slow the world’s economic recovery from the COVID-19 pandemic.

In its monthly report, the IEA increased its global oil demand growth forecast by 170,000 bpd to 5.5 million bpd for 2021 and by 210,000 bpd to 3.3 million bpd for 2022. The agency now expects total oil demand in 2022 to reach 99.6 million bpd, slightly above pre-pandemic levels.

Meanwhile, Saudi Arabia dismissed calls for additional OPEC+ production increases, saying its efforts with allies are sufficient and serving to protect the oil market from the wild price swings seen in natural gas and coal markets.

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The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, collectively known as OPEC+, have done a “remarkable” job acting as so-called regulator of the oil market, Saudi Arabia’s energy minister Prince Abdulaziz bin Salman told a forum in Moscow on Thursday.

At its meeting earlier this month, OPEC+ stuck to its previous agreement to increase output by 400,000 bpd a month as it unwinds production cuts.

Currencies and bonds

The U.S. dollar is continuing to lose ground against its major currency peers today, although the Japanese yen saw losses for the day. That weakness in the greenback is translating into strength for the Canadian dollar, which also has the tailwinds of higher crude oil prices at its back.

Bond yields this morning continue to retreat, with the 10-year U.S. Treasury yield at 1.52%, comfortably below recent highs.

“Long-term yields may be dragging on the USD but short-term rates are firming and provide further justification for bullishness on the USD,” Scotiabank forex strategists said in a note this morning. “Rate sentiment has swung fairly rapidly in favour of rates rising shortly after the middle of next year by which time, according to yesterday’s FOMC minutes, policy makers expect to have wrapped up asset purchases fully. That rather suggests a fairly sharp reduction in broader USD liquidity overhang in the coming year which will be broadly supportive for the USD—as was the case when the Fed backed out of its previous QE measures. Building USD-bullish sentiment is evident—via last week’s CFTC data release and the steady bid for USD risk reversals— but this still all feels quite new; many active accounts remain short or near neutral on the USD, some banks’ data points suggest. This means the USD rally has potentially some ways to go—particularly against those currencies whose central banks will be much slower off the policy adjustment mark.”

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Other corporate news

Miner Barrick Gold Corp, on Thursday reported a nearly 5% rise in third-quarter gold production from the previous three months, as output jumped at its Veladero mine in Argentina. Barrick, the world’s second-largest gold miner by reserves, also reiterated its annual output forecast, saying that fourth-quarter production was set to be the strongest of the year.

Citigroup Inc beat market estimates for third-quarter profit on Thursday, as the bank released loan loss reserves and reaped a windfall of fees from equity underwriting and investment banking advice. For the three months ended Sept. 30, net income jumped 48% to $4.6 billion, or $2.15 per share, from $3.1 billion, or $1.36 per share, a year earlier. Analysts on average had expected a profit of $1.65 per share, accord ing to Refinitiv IBES data.

Morgan Stanley on Thursday reported a bigger third-quarter profit than expected, as it closed more deals and generated a record $1.27 billion from advisory business during the three months. Net income applicable to common shareholders rose to $3.58 billion, or $1.98 per share, in the three months ended Sept. 30, from $2.6 billion, or $1.66 per share, a year earlier. Analysts were expecting a profit of $1.68 per share, according to Refinitiv data. Net revenue rose to $14.75 billion in the third quarter, compared with $11.72 billion a year earlier. Shares of Morgan Stanley were up 1.7% in premarket trading.

UnitedHealth Group Inc rose 2.1% after the health insurer beat analysts’ estimates for third-quarter profit, helped by a jump in revenue from its Optum unit that manages drug benefits.

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co Ltd added 3.4% after the chipmaker posted a 13.8% jump in quarterly profit and lifted its revenue growth forecast for 2021, citing an “industry megatrend” of strong chip demand.

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Walgreens Boots Alliance Inc’s fourth-quarter results beat estimates on higher U.S. and UK pharmacy store sales due to the easing of pandemic-related restrictions and people getting COVID-19 vaccines at its stores. Shares in the Deerfield, Illinois-based company, one of the largest U.S. pharmacies, rose 1.6% to $48 premarket.

Domino’s Pizza Inc reported a surprise drop in U.S. same-store sales on Thursday, signaling a bigger-than-expected slowdown in demand for deliveries as consumers moved away from their pandemic food-ordering habits. Shares of the Michigan-based company were down 6% premarket after it posted a 1.9% drop in same-store sales at its U.S. restaurants during the reported quarter, compared with estimates of a 1.89% increase, according to IBES data from Refinitiv. Its U.S. same-store sales had jumped 17.5% a year earlier.

Canopy Growth Corp. says it has signed a deal to secure the right to buy U.S. cannabis edibles company Wana Brands if the United States moves to allow THC federally. Under the agreement, the Smith Falls, Ont., cannabis company will make an upfront cash payment of US$297.5 million and acquire three call option agreements to acquire Wana entities Mountain High Products LLC, Wana Wellness LLC and the Cima Group LLC.

Economic news

U.S. inflation at the wholesale level rose 8.6% in September compared to a year ago, the largest advance since the 12-month change was first calculated in 2010. The Labor Department reported Thursday that the monthly increase in its producer price index, which measures inflationary pressures before they reach consumers, was 0.5% for September compared to a 0.7% gain in August. The 8.6% rise for the 12 months ending in September compared to an 8.3% increase for the 12 months ending in August, which had been the previous record 12-month gain.

The number of Americans applying for unemployment benefits fell to its lowest level since the pandemic began, a sign the job market is still improving even as hiring has slowed in the past two months. Unemployment claims dropped 36,000 to 293,000 last week, the second straight drop, the Labor Department said Thursday. That’s the smallest number of people to apply for benefits since the week of March 14, 2020, when the pandemic intensified, and the first time claims have dipped below 300,000. Applications for jobless aid, which generally track the pace of layoffs, have fallen steadily since last spring as many businesses, struggling to fill jobs, have held onto their workers.

Statistics Canada says manufacturing sales rose 0.5% to $60.3 billion in August, helped by gains in the petroleum and coal sector and higher chemical sales. The overall increase followed a decline of 1.2% in July. The consensus projection was for a rise of 0.3% from July.

With files from Reuters

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