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Equities

Canada’s main stock index edged higher early Thursday, tracking positive global sentiment. On Wall Street, key indexes were positive after new figures showed a smaller-than-expected increase in inflation at the producer level.

At 9:37 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 43.52 points, or 0.2 per cent, at 21,438.52.

In the U.S., the Dow Jones Industrial Average rose 22.17 points, or 0.06 per cent, at the open to 36,312.49.

The S&P 500 opened higher by 7.21 points, or 0.15 per cent, at 4,733.56, while the Nasdaq Composite gained 56.65 points, or 0.37 per cent, to 15,245.04 at the opening bell.

After this week’s reading on U.S. inflation, which showed the annual rate spiked to a decades-high of 7 per cent in December, markets are shifting focus to earnings, with major U.S. banks set to report on Friday morning. Early Thursday, the U.S. Labor Department reported that the producer price index increased 0.2 per cent last month, below the 0.4 per cent expectation. In the 12 months through December, the PPI jumped 9.7 per cent, below the 9.8 per cent forecast of economists.

“While there is a good reason for caution at the moment, fourth-quarter earnings could offer a timely reminder that there is still plenty to be optimistic about this year,” OANDA senior analyst Craig Erlam said.

“Inflation and interest rates are major headwinds but the economy is strong, the labour market is tight and consumers are in a good position. This may be what investors are clutching on to.”

Thursday's analyst upgrades and downgrades

Early Thursday, Wall Street got results from Delta Airlines. The carrier reported higher quarterly earnings on strong holiday demand but also warned of a loss in the current quarter due to the impact of the Omicron variant. The company’s adjusted profit for the latest quarter came in at 22 US cents a share, beating analysts’ average estimate of 14 US cents per share, according to IBES data from Refinitiv.

In this country, Corus reported before the start of trading. The company posted net income attributable to shareholders of nearly $76.2-million or 36 cents per diluted share for the quarter ended Nov. 30, compared with $76.7-million or 37 cents in the same period a year earlier. Revenue totalled nearly $463.9-million, up from almost $420.4-million in the same quarter

Cogeco releases results after the close and will hold its analyst call on Friday morning.

On the economics side, new U.S. government figures showed weekly jobless claims rose to 230,000, up 23,000 from the week before. Economists had expected a reading closer to 200,000 although the most recent number remains below prepandemic levels.

Later in the morning, the U.S. Senate Banking Committee conducts its vice chair nomination hearing for Federal Reserve governor Lael Brainard.

Overseas, the pan-European STOXX 600 was flat by midday. Britain’s FTSE 100 rose 0.14 per cent. Germany’s DAX added 0.10 per cent while France’s CAC 40 slid 0.6 per cent.

In Asia, Japan’s Nikkei fell 0.96 per cent. Hong Kong’s Hang Seng edged up 0.11 per cent.

Commodities

Crude prices were little changed in early going as a mixed reading on weekly U.S. inventories and continuing concerns over the spread of the Omicron variant cap gains.

The day range on Brent is US$84.18 to US$84.96. The range on West Texas Intermediate is US$82.14 to US$82.94. Both benchmarks gained more than 1 per cent during the previous session.

On Wednesday, new figures from the U.S. Energy Information Administration showed that crude inventories fell by a bigger-than-expected 4.8 million barrels last week. However, stocks of refined products rose, suggesting weaker demand.

The report said gasoline inventories rose by 8 million barrels in the week to Jan. 7, far more than the 2.4 million barrels that analysts had been forecasting.

“Gasoline demand was weaker-than-expected and still below pre-pandemic levels and if this becomes a trend oil won’t be able to continue to push higher,” OANDA senior analyst Ed Moya said in a note.

In other commodities, gold prices were steady.

Spot gold was flat at US$1,825.82 per ounce in the early predawn period. U.S. gold futures was also unchanged at US$1,826.50.

In the previous session, gold hit a one-week high of $1,827.92, its best level since Jan. 5.

“Gold seems like it is in a good place as Treasury yields won’t be rallying much higher until financial markets have balance sheet runoff certainty and that won’t happen until at least a couple more Fed meetings,” Mr. Moya said.

Currencies

The Canadian dollar was higher, trading above 80 US cents in early going, while its U.S. counterpart struggled against global currencies, hitting a two-month low.

The day range on the loonie is 79.92 US cents to 80.23 US cents. The Canadian dollar has rallied more than 3 per cent against the greenback in the past three weeks.

“FX majors have traded in narrow ranges overnight, USD consolidating losses that followed the consumer price index release yesterday,” RBC chief currency strategist Adam Cole said.

“Price action probably reflected very skewed market positioning heading into the release. U.S. yields are toward the bottom of the week’s range despite a run of hawkish Fed comments.”

There were no major Canadian economic releases due on Thursday.

The Globe’s Mark Rendell and Rachelle Younglai report that the House of Commons finance committee has agreed to hold hearings into the causes of high inflation, a move that will keep soaring real estate prices and the rising cost of goods at the top of the political agenda heading into the next sitting of Parliament at the end of the month.

On world markets, the U.S. dollar index, which weighs the greenback against a group of world currencies fell 0.2 per cent to 94.782.

The euro gained 0.3 per cent to trade at US$1.1479, according to figures from Reuters.

Australia’s dollar, often seen as a proxy for risk sentiment, rose 0.3 per cent to US$0.7305.

In bonds, the yield on the U.S. 10-year note was higher at 1.75 per cent in the predawn period.

More company news

Aritzia Inc. beat expectations as its net profit more than doubled on a big boost in revenues in the third quarter of its fiscal year. The Vancouver-based clothing retailer says it earned $64.9-million for the three months ended Nov. 28, compared with $30.5-million in the prior year. Adjusted profits were $71.2-million or 61 cents per share, up from $32.2-million or 29 cents per share a year earlier. Revenues rose 63 per cent to $453.3-million from $278.3-million as retail revenues increased 72 per cent while e-commerce sales rose 47 per cent from the third quarter of 2021. The results were released after Wednesday’s close.

British lawmakers plan to scrutinize increases in the fees Visa and Mastercard charge businesses after the country’s payments regulator found no evidence to justify the rises, a parliamentary committee said on Thursday. Parliament’s Treasury Select Committee said the companies, whose networks account for 99% of card transactions in Britain, had increased the scheme and interchange fees paid by businesses to card issuers when a card is used. “Given that Visa and Mastercard currently dominate this space, it’s vital to ensure that there is sufficient regulation and competition in the market so that businesses are not subject to ever-increasing servicing costs,” the chair of the committee, Mel Stride, said in a statement.

Imperial Oil Ltd said it plans to market its interests in XTO Energy Canada jointly with Exxon Mobil Canada, as part of the company’s ongoing evaluation of its portfolio. Imperial and Exxon Mobil Canada each own 50% of XTO Energy Canada, with assets that include 568,000 net acres in the Montney shale, 85,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta.

Economic news

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

(10 a.m. ET) U.S. Senate Banking Committee conducts vice chair nomination hearing for Governor Lael Brainard.

With Reuters and The Canadian Press