Skip to main content

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 slid at the start of trading Wednesday with tech shares weighing on sentiment and investors awaiting the Bank of Canada policy decision. On Wall Street, indexes saw an uneven start with investors taking a breather after recent gains.

At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 47.25 points, or 0.22 per cent, at 21,115.4.

In the U.S., the S&P 500 was trading near the breakeven line in the first few minutes of trading Wednesday. The losses for tech pulled the Nasdaq down 0.3 per cent while the Dow Jones Industrial Average edged up 0.1 per cent.

Investor sentiment got a boost early Wednesday morning when BioNTech and Pfizer said a three-shot course of their COVID-19 vaccine was shown to generate a neutralizing effect against the new Omicron variant in a laboratory test.

In this country, investors are waiting for the Bank of Canada’s policy decision. Markets will be looking to see if the central bank strikes a more hawkish tone after a blowout reading on November hiring last week. The better-than-expected job creation for the month prompted some economists to suggest that the bank could start moving interest rates higher in the first half of next year.

There will be no press conference after the policy announcement but Bank of Canada Deputy Governor Toni Gravelle is set to deliver the bank’s economic progress report during a speech Thursday afternoon.

“Overall, arguments to keep policy interest rates at emergency low levels are getting thin,” RBC chief currency strategist Adam Cole said.

“We continue to expect the first rate hike to come in April next year, and the BoC to reiterate that, barring significant further disruptions from the new virus variant, the economy is on track to fully recover by mid-2022.”

On the corporate side, investors got results from Dollarama before the start of trading.

Dollarama Inc posted a 5.5-per-cent increase in third-quarter sales. The retailer’s total sales rose to $1.12-billion in the quarter, from $1.06-billion a year earlier.

On Wall Street, Campbell Soup and GameStop report results.

Overseas, the pan-European STOXX was down 0.10 per cent by midday, giving back early gains. Britain’s FTSE 100 added 0.15 per cent. Germany’s DAX and France’s CAC 40 slid 0.51 per cent and 0.09 per cent, respectively.

In Asia, Japan’s Nikkei rose 1.42 per cent following Wall Street’s rally. Hong Kong’s Hang Seng edged up 0.06 per cent.

Commodities

Crude prices wavered after the previous session’s gains as fading concern about the potential impact of the Omicron variant on demand bolsters sentiment.

The day range on Brent is US$74.73 to US$76.03. The range on West Texas Intermediate was US$71.26 to US$72.57. Both benchmarks closed up more than 3 per cent on Tuesday.

“I continue to believe that the lows of last week will be the lows for possibly all of next year,” OANDA senior analyst Jeffery Halley said in an early note.

Later Wednesday morning, markets will get more official U.S. government inventory data from the U.S. Energy Information Administration. Analysts are expecting to see a decline inventories of about 1.7 million barrels last week.

Meanwhile, markets are continuing to watch talks between Washington and Iran over Tehran’s nuclear program, which are expected to resume this week. Western officials have been skeptical about Iran’s demands, according to a Reuters report.

An easing of U.S. sanctions could lead to the introduction of more Iranian oil to the market, putting downward pressure on prices.

Gold prices, meanwhile, were up, helped by a softer U.S. dollar.

Spot gold was up 0.27 per cent at US$1,788.92 per ounce early Wednesday morning, while U.S. gold futures rose 0.33 per cent to US$1,790.50 per ounce.

“The wave of omicron-inspired growth optimism sweeping financial markets overnight appears to be tempting a few gold bulls back into the market in search of a bargain,” Mr. Halley said.

Currencies

The Canadian dollar was steady, holding above 79 US cents, with the Bank of Canada policy decision in focus.

The day range on the loonie is 78.95 US cents to 79.25 US cents.

The Bank of Canada makes its rate decision at 10 a.m. ET. No move is expected on rates but markets will be watching to see what the central bank makes of recent signs of strength in the economy.

On world markets, the U.S. dollar index, which measures the greenback against six major peers, was flat at 96.25, while the euro climbed to US$1.1281, according to figures from Reuters.

The Australian dollar rose as high as US$0.71425.

The British pound held at US$1.3239, consolidating around the middle of this week’s trading range.

In bonds, the yield on the U.S. 10-year note was down at 1.436 per cent in the predawn period.

More company news

Cenovus Energy Inc on Wednesday forecast higher capital expenditure for 2022, as the Canadian energy company bets on a recovery in crude and gas prices from pandemic lows. The Calgary, Alberta-based firm expects 2022 spending to be in the range $2.6-billion and $3-billion, higher than 2021 expectation of $2.3-billion and $2.7-billion.

Campbell Soup Co missed market expectations for quarterly revenue on Wednesday, as consumers headed out to restaurants after COVID-19 curbs eased, impacting sales of the company’s ready-to-eat meals and soups. Net sales fell to $2.24-billion in the first quarter ended Oct. 31, from $2.34-billion a year earlier. Analysts were expecting revenue of $2.28-billion, according to Refinitiv IBES.

Economic news

(10 a.m. ET) Bank of Canada policy announcement

(10 a.m. ET) U.S. Job Openings & Labor Turnover Survey for October.

With Reuters and The Canadian Press