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Equities

Canada’s main stock index edged higher early Wednesday with gains in mining stocks helping offset weakness in the energy sector. On Wall Street, key indexes wavered in the wake of positive earnings from U.S. retailers.

At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 21.79 points, or 0.1 per cent, at 21,738.95.

In the U.S., the Dow Jones Industrial Average rose 17.48 points, or 0.05 per cent, at the open to 36,159.70.

The S&P 500 opened higher by 0.60 points, or 0.01 per cent, at 4,701.50, while the Nasdaq Composite dropped 0.24 points to 15,973.62 at the opening bell.

Ahead of the opening bell, U.S. investors get results from retailers Target and Lowe’s. On Tuesday, Home Depot and Walmart both reported better-than-forecast results, raising expectations for the coming holiday shopping season.

Lowe’s hiked its full-year sales forecast. The home improvement retailer said it expects fiscal year 2021 total sales of about US$95-billion, compared to a previous forecast of about US$92-billion. Target raised its annual same-store sales after beating analysts’ expectations in the latest quarter.

“All signs are pointing to a very strong holiday season for retailers and that should help keep sending stocks higher,” OANDA senior analyst Ed Moya said.

“Financial markets are fixated on inflation but now agree that it can get a little uglier over the next couple of months before traders get unnerved.”

In this country, investors got earnings from the grocery sector, with results from Loblaw Cos. Ltd and Metro Inc.

Loblaw said revenue rose to $16.05-billion in the third quarter from $15.67-billion from a year earlier, surpassing analyst estimates of $15.89-billion, according to IBES data from Refinitiv.

Markets will got a reading on inflation in this country.

Statistics Canada says the annual rate of inflation rose to 4.7 per cent in October, from 4.4 per cent in September. The increase was the biggest since February 2003, the agency said.

Elsewhere, The Globe reports that Joe Natale has been removed as chief executive of Rogers Communications Inc. by the company’s board led by chair Edward Rogers. The company’s former chief financial officer, Tony Staffieri, will be interim CEO.

Rogers shares were down nearly 2 per cent in early trading in Toronto.

Overseas, the pan-European STOXX 600 edged up 0.14 per cent by midday. Britain’s FTSE 100 slid 0.38 per cent. Germany’s DAX and France’s CAC 40 rose 0.12 per cent and 0.09 per cent, respectively.

In Asia, Japan’s Nikkei finished down 0.40 per cent. Hong Kong’s Hang Seng slid 0.25 per cent.

Commodities

Crude prices slid amid continued speculation that the U.S. may release oil from emergency reserves to cool rising energy costs.

The day range on Brent is US$81.49 to US$82.22. The range on West Texas Intermediate is US$79.81 to US$80.69.

“Crude prices remain very choppy as energy traders await a decision from the Biden administration over an SPR [Strategic Petroleum Reserve] release,” OANDA’s Ed Moya said in a note.

“It seems the energy market is convinced that even if the U.S. resorts to tapping the strategic petroleum reserve, the benefits would be minimal and yield little benefit to the US consumer.”

Meanwhile, fresh industry figures showing a decline in gasoline inventories stoked speculation about a potential release of reserves. Reuters reports that support in the U.S. for such a move is mixed. U.S. House Majority Leader Steny Hoyer said late on Tuesday he did not agree with Senate Majority Leader Chuck Schumer’s call on Sunday for tapping the SPR to lower gas prices, saying the reserve was there to fill a crude oil supply gap in times of emergency, the news agency reports.

New figures from the American Petroleum Institute showed that U.S. gasoline inventories fell by 2.8 million barrels last week, more than analysts had been forecasting. Crude stocks rose by 655,000 barrels. That was less than analysts had been expecting.

More official U.S. government inventory figures are due later Wednesday morning.

In other commodities, gold prices were up in early morning trading.

Spot gold rose 0.6 per cent to US$1,860.21 per ounce. U.S. gold futures gained 0.5 per cent to US$1,862.40.

Currencies

The Canadian dollar was down slightly as its U.S. counterpart touched its best level in more than a year against a group of global currencies.

The day range on the loonie is 79.44 US cents to 79.75 US cents.

Investors will be closely watching the morning release of October inflation figures by Statistics Canada.

On world markets, the U.S. dollar index, which weighs the greenback against a selection of world currencies, rose 0.1 per cent to 96.053 after earlier touching 96.266 for the first time since July last year, according to figures from Reuters.

The U.S. dollar rose to as high as 114.975 yen, its highest since March 2017 before retreating to trade at 114.88 yen.

The euro fell to US$1.1263 for the first time since July 2020 before trading 0.2 per cent lower at US$1.1308.

Britain’s pound, meanwhile, rose to one-week high against the U.S. dollar and a 21-month high against the euro after British inflation hit a decade high, raising expectations that the Bank of England could soon hike rates.

“Just weeks after the disappointment of the last BoE meeting, it looks like markets are prepared to get dressed up and think about meeting [Bank of England Governor] Andrew Bailey for a U.K. rate hike,” IG chief market analyst Chris Beauchamp said.

“It should be a case of ‘once bitten, twice shy’ but today’s inflation data and recent comments from the governor (apparently we do still listen...) have once again raised hopes of a change in U.K. policy.”

In bonds, the yield on the U.S. 10-year note was down slightly at 1.628 per cent in the early predawn period.

More company news

Metro Inc. reported its fourth-quarter profit rose compared with a year ago as its sales edged lower. The Montreal-based grocery and drugstore retailer says it earned $194-million or 79 cents per diluted share for the 12-week period ended Sept. 25, up from a profit of $186.5-million or 74 cents per share in the same quarter a year earlier. Sales in the quarter totalled $4.09-billion, down from $4.14-billion in the same quarter last year when the company says it saw exceptionally strong sales due to the pandemic.

Amazon.com Inc said on Wednesday it would stop accepting Visa Inc credit cards issued in the United Kingdom from next year due to the high fees charged by the payment processor for transactions. “As a result of Visa’s continued high cost of payments, we regret that Amazon.co.uk will no longer accept UK-issued Visa credit cards as of 19 January, 2022,” an Amazon spokesperson said told Reuters in an e-mailed statement. Amazon customers can still use Visa debit cards, Mastercard and Amex credit cards, and Eurocard, the company said in a note to its customers.

Economic news

(8:30 a.m. ET) Canadian CPI for October.

(8:30 a.m. ET) U.S. housing starts for October.

(8:30 a.m. ET) U.S. building permits for October.

With Reuters and The Canadian Press

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