Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
Equities
Canada’s main stock index traded at record highs early Thursday as mining shares gained on the back of rising gold prices. On Wall Street, the Nasdaq and S&P 500 started higher while shares of Walt Disney Co. fell on disappointing results.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 118.79 points, or 0.6 per cent, at 21,602.12.
The Dow Jones Industrial Average fell 41.16 points, or 0.11 per cent, at the open to 36,038.78.
The S&P 500 opened higher by 12.68 points, or 0.27 per cent, at 4,659.39, while the Nasdaq Composite gained 129.38 points, or 0.83 per cent, to 15,752.08 at the opening bell.
The moves came after figures released Wednesday showed the annual rate of inflation in the United States hit 6.2 per cent in October, the highest in three decades.
“At this point, even if inflation is transitory, it is unacceptably high for justifying the unresponsive Fed,” Ipek Ozkardeskaya, senior analyst with Swissquote, said, referring to the central bank’s frequent suggestion that it expects price pressures to abate over time.
“Higher rates wouldn’t solve the problem of chip shortages or the bottlenecks, or other pandemic related factors, but it could slowdown demand and narrow the gap.”
Bond markets on both sides of the border will be closed on Thursday for Remembrance Day and Veterans Day.
In Canada, earnings continue to make headlines with results on tap from Canadian Tire, Cineplex, CAE and Cogeco among others.
Canadian Tire reported revenue of $3.91-billion in the latest quarter, down from $3.99-billion in the same period last year. Analysts surveyed by Refinitiv IBES had been looking for revenue of $3.97-billion.
On Wall Street, Disney shares were down more than 8 per cent in morning trading in New York after the entertainment giant reported the smallest increase in subscriptions for its Disney+ streaming service since its launch. In the most recent quarter Disney+ added 2.1 million customers, far short of the 10.2 million analysts had been expecting, according to Factset estimates. As well, profits at Disney’s theme parks came in short of analysts’ forecasts during the period. The results were released after the close on Wednesday.
Overseas, the pan-European STOXX 600 was up 0.16 per cent by afternoon. Britain’s FTSE 100 gained 0.32 per cent. Germany’s DAX and France’s CAC 40 rose 0.08 per cent and 0.06 per cent, respectively.
In Asia, Japan’s Nikkei finished up 0.59 per cent. Hong Kong’s Hang Seng gained 1.01 per cent. Shares of debt-laden Evergrande were up more than 6 per cent in Hong Kong on reports that a number of bondholders received coupon payments, easing default concerns.
Commodities
Crude prices gave up early gains, extending losses seen in the previous session on concerns that rising energy prices could lead the U.S. to release more strategic crude stockpiles to temper costs.
The day range on Brent is US$82.46 to US$83.37. The range on West Texas Intermediate is US$81.06 to US$82.16. On Wednesday, Brent fell by more than 2 per cent while WTI lost more than 3 per cent.
“It seems unlikely crude prices can break above recent highs until energy traders see whatever action will come from the Biden administration,” OANDA senior analyst Ed Moya said.
“The oil market deficit is firmly in place and that should prevent WTI crude from seeing a significant pullback.”
Reuters reports that U.S. President Joe Biden asked the National Economic Council to work to reduce energy costs and the Federal Trade Commission to push back on market manipulation in the energy sector to reverse inflation. Some of the efforts to cut energy costs could include releasing more crude from the U.S. Strategic Petroleum Reserve (SPR).
Elsewhere, gold prices were near a five-month high as investors sought out safer holdings after the higher-than-forecast reading on U.S. inflation.
Spot gold rose 0.6 per cent to US$1,860.59 per ounce early Thursday. U.S. gold futures gained 0.8 per cent to US$1,863.30.
“Inflation hitting a 30-year high was music to gold traders’ ears,” Mr. Moya said.
“The way the gold trade is unfolding is looking mostly bullish. The labor market recovery will likely take longer than a few months for the Fed to say mission accomplished on maximum employment and pricing pressures will continue to trigger inflation-hedges into bullion.”
Currencies
The Canadian dollar was down as its U.S. counterpart touched its best level in 16 months against a group of world currencies in the wake of the latest U.S. inflation figures.
The day range on the loonie is 79.77 US cents to 80.12 US cents.
There were no major Canadian economic releases due on Thursday.
On world markets, the U.S. dollar rose 0.2 per cent to 95.02, its strongest since July 2020, as traders bet that the Federal Reserve would ultimately raise interest rates to temper spiking inflation.
The euro slid to US$1.1459 on Thursday, its lowest since July 2020, according to figures from Reuters.
The pound was also marginally weaker on Thursday at a new 11-month low of US$1.3388 despite better-than-expected GDP data out of Britain.
The yen slid to 114.15 per U.S. dollar - close to the Japanese currency’s four-year low of 114.69 reached last month.
More company news
Brookfield Asset Management Inc. reported its third-quarter more than quadrupled compared with a year ago, boosted by continued growth and investment performance across its business. The alternative asset manager says it earned a profit attributable to shareholders of US$797-million or 47 cents per diluted share for the quarter ended Sept. 30. That compared with a profit of US$172-million or 10 cents per diluted share in the same quarter last year. Revenue totalled US$19.25-billion, up from US$16.25-billion a year ago.
Cineplex Inc. reported a loss of $33.6-million in its latest quarter as movie audiences grew with all of its theatres open again. The movie theatre company says the loss amounted to 53 cents per diluted share for the quarter ended Sept. 30 compared with a loss of $121.2-million or $1.91 per diluted share a year ago.
CAE Inc on Thursday posted a quarterly profit versus a year-ago loss, as an uptick in travel demand boosted sales of its flight simulators. The Saint-Laurent, Quebec-based company posted a net income of $14-million, or 4 cents per share, in the second quarter, compared with a year-ago loss of $5.2-million, or 2 cents per share,.
Reuters reports that Didi Global is preparing to relaunch its ride-hailing and other apps in China by the end of the year in anticipation that Beijing’s cybersecurity investigation into the company will be wrapped up by then, citing three people directly involved in the relaunch said. The people, who declined to be identified as the information was private, said they expected China’s cyberspace regulator to finalize any penalties on the company in December. The company has set aside 10 billion yuan (US$1.6-billion) for a potential fine, said one of the sources.
The Globe’s Alexandra Posadzki reports Ottawa-based Telesat has applied to list on the Toronto Stock Exchange as it looks to raise funds for a multibillion-dollar project to beam high-speed internet to remote areas from a constellation of low-Earth orbit satellites. The satellite operator is also planning to list on the NASDAQ. Its shares are expected to start trading on the two exchanges as early as Nov. 19, under the ticker symbol TSAT. The TSX has not yet approved the listing application, which was filed on Nov. 9.
With Reuters and The Canadian Press
Terry Weber