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Equities
Canada’s main stock index opened lower Friday with tech shares under pressure. On Wall Street, key indexes were also in the red, weighed down by a drop in Amazon shares on the back of disappointing results.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 105.43 points, or 0.5 per cent, at 21,015.63.
In the U.S., the Dow Jones Industrial Average fell 129.4 points, or 0.38 per cent, at the open to 33787.01.
The S&P 500 fell 33.7 points, or 0.79 per cent, at the open to 4253.75, while the Nasdaq Composite dropped 161.1 points, or 1.25 per cent, to 12710.416 at the opening bell.
“The petrified tail-chasing we have seen this week as equity markets swing from ‘we’re all doomed, get me out,’ to ‘I don’t want to miss the absolute bottom of the stock market, get me in’ is perhaps indicative of the state of confusion out there,” OANDA senior analyst Jeffery Halley said.
“These sorts of periods of volatility usually happen before a big directional move. Markets are being buffeted by wars, inflation, slowdowns, overheating economies, supply chain disruptions, energy shortages and monetary policy moves etc.”
On Friday, investors will be keeping a close eye Amazon shares. The stock was down more than 12 per cent in early trading after the online retail giant predicted current-quarter sales below forecasts. Amazon forecast net sales of between US$116-billion and US$121-billion for the second quarter. Analysts were expecting US$125.48-billion, according to IBES data from Refinitiv. The company also reported a loss of US$3.8-billion, or US$7.56 per share in the most recent quarter, compared with a profit of US$8.1-billion, or US$15.79 per share, a year earlier. The loss partly reflected a $7.6-billion decline in the value of its stake in electric vehicle maker Rivian.
Meanwhile, Apple Inc. shares were also weaker despite an earnings beat. Apple’s overall fiscal second-quarter revenue was US$97.3-billion, up 8.6 per cent from last year and higher than analysts’ average estimate of US$93.89-billion, according to Refinitiv data. However, the company also cautioned that supply chain issues could hit revenue in the current quarter.
Ahead of Friday’s open, Wall Street investors got earnings from energy giants Exxon Mobil and Chevron. In Canada, Exxon-owned Imperial Oil also reported.
Exxon Mobil doubled its first-quarter per-share profit, helped by surging oil and gas prices. The U.S. oil producer reported net income of US$5.48 billion, or US$1.28 per share, in the three months ended March 31, compared with US$2.73-billion, or 64 US cents per share, last year.
Imperial oil, meanwhile, posted net earnings of $1.17-billion, or $1.75 per share, from $392-million, or 53 cents per share, a year ago.
Elsewhere, Canadian investors got a stronger-than-expected reading on broad economic growth earlier this year. Statistics Canada says GDP grew 1.1 per cent on a monthly basis as parts of the country emerged from COVID-19 restrictions. Economists had been expecting an increase of 0.8 per cent.
Overseas, the pan-European STOXX 600 rose 1.09 per cent by midday. Britain’s FTSE 100 gained 0.51 per cent. Germany’s DAX and France’s CAC 40 rose 1.07 per cent and 0.70 per cent, respectively.
In Asia, Hong Kong’s Hang Seng spiked 4.01 per cent on gains in Chinese tech shares. Markets in Japan were closed.
Commodities
Crude prices were up in early going and headed for a monthly gain as supply concerns continue to underpin the market.
The day range on Brent is US$106.60 to US$109. The range on West Texas Intermediate is US$104.54 to US$106.58. Brent rose by more than 2 per cent on Thursday while WTI added more than 3 per cent. Both contracts are on track for a fifth month of gains.
“Besides the usual tractor pull and the battle between China lockdowns and the expected decline in Russian production, oil traders also acknowledge that EU policymakers have the unenviable task of cutting Russian oil dependency without instantaneously tipping the EU economy into recession while simultaneously compensating Russia via higher oil prices for its remaining exports,” Stephen Innes, managing partner with SPI Asset Management, said.
Meanwhile, traders are also now looking ahead to the next meeting by OPEC+ members, set for May 5. Reuters, citing six sources from the group, says OPEC+ is likely to stick to its existing production plan and agree to another small output increase for June.
In other commodities, gold prices were firmer but looked set for their first monthly drop since January as more aggressive rate hikes by the Federal Reserve loom.
Spot gold was up 0.6 per cent at US$1,905.67 per ounce by early Friday morning, but had lost about 1.6 per cent so far this month. U.S. gold futures were up 0.9 per cent at $1,908.10.
Currencies
The Canadian dollar was higher while its U.S. counterpart pulled back from 20-year highs against a basket of currencies.
The day range on the loonie is 78.03 US cents to 78.59 US cents. The loonie held early gains after Statistics Canada reported the Canadian economy grew 1.1 per cent on a monthly basis in February, better than economists had been forecasting. The early outlook for March suggests growth of 0.5 per cent.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, was down 0.7 per cent on the day at 102.91, but still set for a 4.7 per cent gain in April, according to figures from Reuters. That would be the best monthly showing since 2015.
The euro was on track for a 4.4-per-cent monthly decline against the U.S. dollar and set for its worst month since 2015.
The British pound edged higher to US$1.256 as the U.S. dollar weakened, but was still set for its biggest monthly drop since 2016, Reuters reported.
More company news
Pot producer Hexo Corp named Charlie Bowman as its acting chief executive officer on Friday, replacing Scott Cooper who is stepping down after just six months into the job. In February, the company had said it would refresh its board as part of a deal with activist shareholder Adam Arviv and his fund Kaos Capital.
Pipeline operator TC Energy reported a quarterly profit, compared with a year-earlier loss when it took $2.2-billion impairment charges related to the suspension of its Keystone XL pipeline project. Net income attributable to common shares stood at $358-million, or 36 cents per share, in the three months ended March. 31, compared with a loss of $1.1-billion, or $1.1 per share, a year earlier.
Auto parts maker Magna International Inc lowered its annual profit forecast, indicating that a global semiconductor shortage and rising raw material prices would continue to weigh on global vehicle production. Magna expects net income attributable to the company between US$1.3-billion and US$1.5-billion, down from its previous forecast of US$1.7-billion to US$1.9-billion.
Chevron Corp’s first-quarter profit nearly quadrupled from the same period a year ago, easily surpassing Wall Street’s forecasts as oil and gas prices surged following Russia’s invasion of Ukraine. The second-largest U.S. oil producer on Friday posted adjusted earnings of US$6.5-billion, or US$3.36 per share, 8 US cents above Wall Street’s mean estimate of US$3.28, according to Refinitiv. Chevron earned US$1.7-billion, or 90 US cents per share, in the same quarter last year.
Chipmaker Intel Corp forecast second-quarter revenue and profit below Wall Street expectations on Thursday on worries of weak demand in its largest market, PCs, and increased supply-chain uncertainty due to COVID-19 lockdowns in China. The company expects current-quarter adjusted profit of 70 U.S. cents per share on revenue of about US$18-billion, below analysts’ average estimate of 83 U.S. cents per share on US$18.38 billion, according to IBES data from Refinitiv.
Economic news
(8:30 a.m. ET) Canada’s monthly GDP for February.
(8:30 a.m. ET) U.S. personal spending and income for March.
(8:30 a.m. ET) U.S. core PCE price index for March.
(8:30 a.m. ET) U.S. employment cost index for Q1.
(9:45 a.m. ET) U.S. Chicago PMI for April.
(10 a.m. ET) U.S. University of Michigan consumer sentiment for April.
With Reuters and The Canadian Press
Terry Weber