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Equities
Canada’s main stock index slid at Monday’s open as investors remained cautious heading into the final trading day of a volatile month. On Wall Street, key indexes were mixed with markets awaiting key earnings reports later in the week.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 29.25 points, or 0.14 per cent, at 20,712.5.
In the U.S., the Dow Jones Industrial Average fell 34.30 points, or 0.10 per cent, at the open to 34,691.17.
The S&P 500 opened lower by 0.06 points, at 4,431.79, while the Nasdaq Composite gained 41.62 points, or 0.30 per cent, to 13,812.19 at the opening bell.
“January has been a month which has proved to be hugely challenging to define a narrative for more than a day,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“Friday’s rebound in U.S. markets partly stemmed from a record-breaking quarter for Apple, which helped underpin sentiment around a tech sector that has come under increasing scrutiny about the sustainability of some valuations,” he said.
Central banks with continue to make headlines this week with policy decisions due from the Bank of England and the European Central bank. Markets are expecting the Bank of England to hike rates while the ECB is seen holding steady.
In this country, Canadian investors will get a reading on broad economic growth the release of GDP figures for November on Tuesday. Adam Cole, chief currency strategist with RBC, says that bank’s economists expect to seen growth of 0.3 per cent for the month with a forecasts for a similar gain in December.
Both Canadian and U.S. markets will get employment figures on Friday.
U.S. earnings this week include Google-parent Alphabet on Tuesday and Amazon.com Inc. on Thursday. In Canada, investors will get results from Imperial Oil on Tuesday and BCE and Suncor on Thursday.
Overseas, the pan-European STOXX 600 was up 0.52 per cent by midday. Britain’s FTSE 100 edged up 0.14 per cent. Germany’s DAX advanced 0.55 per cent while France’s CAC 40 slid 0.28 per cent.
In Asia, Japan’s Nikkei finished up 1.07 per cent. Hong Kong’s Hang Seng also advanced 1.07 per cent.
Commodities
Crude prices were up and headed for their biggest monthly increase in almost a year as geopolitical concerns continue to raise supply worries.
The day range on Brent is US$88.85 to US$89.80. The range on West Texas Intermediate is US$87.22 to US$88.16.
Both benchmarks have risen about 17 per cent in January, the biggest monthly increase since last February. Both also saw their sixth weekly advance last week.
“Crude prices have been on fire, rising for a sixth straight week as the demand outlook improves and over geopolitical fears could lead to severe production disruptions,” OANDA senior analyst Ed Moya said.
“The supply side continues to support a tight market as OPEC+ is expected to stick to their plan of increasing output by 400,000 bpd in March, even though their compliance last month only hit 60 per cent of plan.”
Tensions between Russia and Ukraine continue to support prices.
The head of NATO said on Sunday that Europe needed to diversify its energy supplies as Britain warned it was “highly likely” that Russia was looking to invade Ukraine, according to Reuters.
In other commodities, gold prices were down as markets anticipate rising interest rates.
Gold prices fell on Monday and were set for the biggest monthly drop since September as markets anticipated higher U.S. interest rates, while a stronger dollar added to the pressure.
Spot gold was down 0.1 per cent at US$1,790.00 per ounce. Spot gold is down about 2 per cent on the month. U.S. gold futures were up 0.3 per cent to US$1,791.60.
“It’s just that continuation of the real rates moving higher again and that’s producing a more negative backdrop for gold, and I think the focus this week is going to be on (U.S.) non-farm payroll (data) on Friday,” Stephen Innes, managing partner at SPI Asset Management, said.
Currencies
The Canadian dollar was firmer while its U.S. counterpart pulled back from recent highs against a group of world currencies.
The day range on the loonie is 78.26 US cents to 78.62 US cents.
“The CAD has picked up a little ground on the session, alongside its commodity peers, while FX havens (Swiss franc, Japanese yen) are under-performing,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“Risk appetite remains cautious, however, and while market sentiment remains an important influence on the CAD’s performance, we note that narrower spreads, reflecting market disappointment after the Boc’s decision to stand pat last week, are perhaps the biggest drag on the CAD right now.”
Key releases for the loonie this week will be November GDP numbers on Tuesday and employment figures for January on Friday.
On world markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, slid 0.2 per cent to 97.02 early Monday. On Friday the index touched its best levels since mid-2020 and posted a gain for the week of 1.6 per cent, according to figures from Reuters.
The Australian dollar was among the early gainers versus the U.S. dollar, up more than 0.5 per cent at US$0.7043. Australia’s central bank is due to deliver its next policy announcement on Tuesday.
More company news
BlackBerry Ltd. said Monday it has struck a deal with Catapult IP Innovations Inc. to sell its non-core patent assets to for US$600-million. BlackBerry said patents that are essential to BlackBerry’s current core business operations are excluded from the transaction. BlackBerry will receive a license back to the patents being sold, which relate primarily to mobile devices, messaging and wireless networking.
Hedge fund Elliott Management and investment firm Vista Equity Partners have agreed to buy Citrix Systems in a deal valued at $16.5 billion, the cloud computing company said on Monday. Reuters reported on Sunday that Elliott and Vista were nearing a $13 billion deal for Citrix, citing a person familiar with the matter, as they seek to tap the pandemic-driven boom in cloud computing.
Economic news
(8:30 a.m. ET) Canada’s industrial product price index for December.
(8:30 a.m. ET) Canada’s raw materials price index for December.
(9:45 a.m. ET) U.S. Chicago PMI for January.
With Reuters and The Canadian Press
Terry Weber