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.
Canada’s main stock index edged higher at Thursday’s opening bell with energy stocks finding some support in steadying crude prices. On Wall Street, indexes were also positive in early trading helped by a pullback in bond yields.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 37.28 points, or 0.2 per cent, at 19,041.32.
In the U.S., the Dow Jones Industrial Average rose 87.20 points, or 0.29 per cent, at the open to 30,570.33.
The S&P 500 opened higher by 14.82 points, or 0.39 per cent, at 3,774.71, while the Nasdaq Composite gained 84.60 points, or 0.77 per cent, to 11,137.68 at the opening bell.
“Sentiment has continued to ebb and flow this week, as stock markets continue to get buffeted by concerns about recession against a backdrop of central banks who appear determined to squeeze inflation out of the global economy,” Michael Hewson, chief market analyst with CMC Markets, U.K., said.
“A slide in oil and base metals prices speaks to a general concern about waning global demand, even against a backdrop of tighter supply due to Russia’s war against Ukraine,” he added.
On Wednesday, Federal Reserve chair Jerome Powell told Congress that the central bank remains “strongly committed” to bringing down high inflation and admitted that a recession was “certainly a possibility.” In a new report, Citigroup forecast a near 50-per-cent probability of a global recession, citing central banks efforts to head off inflation by aggressively hiking interest rates.
Mr. Powell continues his testimony in Washington on Thursday morning.
In this country, Statistics Canada released its early forecast of factory sales. The agency says manufacturing sales in May likely fell 2.5 per cent. The decline was mainly due to lower sales in the motor vehicle and primary metal industries, Statscan said.
South of the border, applications for jobless aid for the week ending June 18 fell to 229,000, a decline of 2,000 from the previous week, the Labor Department reported Thursday. First-time applications generally mirror the number of layoffs.
On the corporate side, BlackBerry releases earnings after the close of trading.
The Globe’s David Milstead and Clare O’Hara report that stockholders at BlackBerry Ltd. and CI Financial Corp. rejected the companies’ approach to executive compensation in “say on pay” votes at their annual shareholder meetings on Wednesday and showed their displeasure with some of the directors they saw as responsible. Say-on-pay votes are a corporate governance practice that allows shareholders to show their approval, or lack thereof, for corporate boards’ pay policies for their companies’ top executives in a vote at annual general meetings.
BlackBerry said it had received 44 per cent support for its pay philosophy, with 56 per cent of shareholders voting against it. CI Financial received 45 per cent support, with 55 per cent opposition.
Overseas, the pan-European STOXX 600 edged up 0.03 per cent after being down as much as 1 per cent early in the session. Germany’s DAX slid 0.34 per cent while France’s CAC 40 added 0.39 per cent. Britain’s FTSE 100 gained 0.33 per cent.
In Asia, Japan’s Nikkei edged up 0.08 per cent. Hong Kong’s Hang Seng advanced 1.26 per cent.
Oil prices continue to take a hit as concerns of recession loom, and interest rates advance in major economies.
The day range on Brent is US$108.04 to US$110.80. The range on West Texas Intermediate (WTI) is US$102.32 to US$105.13. Predawn, Brent was down 2.64 per cent, and WTI fell 2.69 per cent before steadying ahead of the North American open.
“Oil markets remained under pressure as investors were concerned that U.S. rate hikes would stall an economic recovery and dampen fuel demand,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.
U.S. Federal Reserve chief Jerome Powell said on Wednesday that the central bank did not want to deepen the risk of recession to curb inflation, but it considered restoring price stability essential even with the concern of economic downturn. Powell added that interest rate increases would be decided on a “meeting by meeting” basis.
U.S. President Joe Biden called on Congress to suspend the federal gasoline tax for three months to offset some financial burden imposed by record pump prices. Fujitomi’s Saito predicted that “retail prices would remain high, making it difficult to stimulate demand.” He surmised that WTI could decline to below $100 per barrel before July 4 in the U.S.
The U.S. Energy Information Administration said its weekly oil data will be delayed past its scheduled release on Thursday due to systems issues until at least next week.
On the gold front, gold prices eased on Thursday after Powell’s remarks cemented expectations of aggressive interest rate hikes.
Spot gold fell 0.2 per cent to $1,834.33 per ounce by early Thursday morning. U.S. gold futures dropped 0.1% to $1,835.60.
“Gold is expected to follow the commodity complex down. It is more likely for gold to trade below $1,800/oz in the next two weeks than not,” said Michael Langford, director at corporate advisory AirGuide.
“Gold is crypto for Boomers, it has no meaningful industrial usage and is a psychological store of value much in the same way crypto was for the younger generation.”
The Canadian dollar was weaker, trading in a fairly narrow range, as commodities prices slid and global sentiment remained uncertain.
The day range on the loonie is 77 US cents to 77.30 US cents.
“Markets have a conventional risk-off tone overnight,” RBC chief currency strategist Adam Cole said.
On world markets, the euro fell after weak purchasing managers index readings out of Germany and France. Against the U.S. dollar, the euro declined 0.6 per cent to US$1.0498, falling below the US$1.05 line for the third time this week, according to figures from Reuters.
Weakness in the euro helped shore up the U.S. dollar, which steadied against a basket of world currencies after sliding in the early hours. The U.S. dollar index, which weighs the greenback against a group of world currencies, is down more than 1 per cent from the high seen in mid-June when the Fed hiked interest rates by three quarters of a percentage point.
The Norwegian currency was also one of the big gainers against the euro after that country’s central bank raised benchmark interest rates by 50 basis points on Thursday, its largest single hike since 2002, Reuters reports.
In bonds, the yield on the U.S. 10-year note was down slightly at 3.078 per cent shortly after the North American open.
More company news
Imperial Oil Ltd. has signed a deal with E3 Lithium for a lithium project in Alberta and agreed to invest $6.35 million in the company. The agreement helps advance E3 Lithium’s Clearwater project, which will draw lithium from under the Leduc oilfield. It includes drilling lithium evaluation wells and the scaling up of E3 Lithium’s technology, which brings the brine liquid to the surface where the lithium is removed and concentrated.
U.S. sportswear maker Nike is making a full exit from Russia, three months after suspending its operations there, the company said in an emailed statement Thursday.
The Globe’s Susan Krashinsky Robertson reports Walmart Canada is dipping a toe into the growing competition for rapid-delivery grocery customers, testing out a 30-minute service in the Greater Toronto Area starting on Thursday. The company is announcing the launch of Walmart Now in partnership with third-party delivery company Instacart, which will fill orders in as little as half an hour from 10 Walmart stores in the city. If successful, the service could expand to more markets in Canada. The news was released just a day after Loblaw Companies Ltd. announced its own quick-delivery initiative, which will launch in August in a partnership with San Francisco-based DoorDash Inc.
Instagram said on Thursday it is testing new options for users to verify their age on the platform, starting with people in the United States. The photo-sharing service owned by Meta Platforms Inc said it is testing two new ways to verify a person’s age, in addition to allowing them to upload their identity proof online.
Euro zone and Japan PMI
ECB Economic Bulletin released
(8:30 a.m. ET) Canadian manufacturing sales for May.
(8:30 a.m. ET) Canadian wholesale trade for May.
(8:30 a.m. ET) U.S. initial jobless claims for week of June 18.
(8:30 a.m. ET) U.S. current account deficit for Q4.
(10 a.m. ET) U.S. Fed Chair Jerome Powell testifies to the House Financial Services Committee.
With Reuters and The Canadian Press