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Equities
Stock indexes on both sides of the border put in a subdued start at Wednesday’s open with investors awaiting the minutes from the latest Federal Reserve meeting amid continuing concerns about global growth.
At 9:36 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 8.34 points, or 0.04 per cent.
In the U.S., the Dow Jones Industrial Average fell 10.52 points, or 0.03 per cent, at the open to 30,957.30.The S&P 500 opened higher by 0.59 points, or 0.02 per cent, at 3,831.98, while the Nasdaq Composite gained 15.66 points, or 0.14 per cent, to 11,337.90 at the opening bell.
On Wednesday, traders will be awaiting the minutes from the latest Fed meeting, when the central bank hiked rates by an outsized 75 basis points in a bid to bring inflation under control. Markets will be watching for clues about the size of coming rate hikes.
“Having got transitory inflation so utterly wrong and stubbornly clung to a dogma past its sell-by date, if the FOMC blinks now, they may as well do an Elvis and leave the building,” OANDA senior analyst Jeffrey Halley said in an early note.
The Fed minutes are due at 2 p.m. ET.
In this country, The Globe’s Temur Durrani reports Shopify Inc. is putting off a compensation overhaul that would give its employees more choice in how they are paid, as the Ottawa-based company addresses the challenges posed by its fallen stock price and the persistent sell-off pummelling the technology sector.
Elsewhere, TSX-listed shares of Resolute Forest Products surged in early trading on news Domtar-parent Paper Excellence Group has struck a deal to buy the company for US$20.50 a share. That values the company at about US$2.7-billion.
Overseas, the pan-European STOXX 600 was up 1.70 per cent by midday. Britain’s FTSE 100 rose 1.79 per cent. Germany’s DAX and France’s CAC 40 advanced 1.49 per cent and 1.61 per cent, respectively.
In Asia, Japan’s Nikkei closed down 1.20 per cent. Hong Kong’s Hang Seng finished down 1.22 per cent.
Commodities
Crude prices bounced in early going after a day of heavy losses as supply concerns provided some support to sentiment.
The day range on Brent is US$103 to US$105.85. The range on West Texas Intermediate is US$99.03 to US$102.14. Both benchmarks saw their biggest daily drop since March on Tuesday, with WTI falling below US$100 a barrel.
“Oil is slightly up this morning, near the US$100 resistance, but the market rhetoric shifts from buying the dips to selling the tops,” Swissquote senior analyst Ipek Ozkardeskaya said.
“The next downside target is set at US$93, the 200-day moving average, then to US$85, my year-end target.”
However, OANDA’s Jeffrey Halley said in a note that oil prices “may be in danger of overshooting to the downside.”
“The price action [on Tuesday], with both contracts trading in near fifteen dollar ranges, hints more at panic and forced liquidation, than a structural change in the tight supply-demand situation globally,” he said.
In other commodities, gold prices were modestly higher after dropping more than 2 per cent in the previous session.
Spot gold rose 0.2 per cent to US$1,768.19 per ounce by early Wednesday morning, after it dipped to US$1,762.45, its lowest since mid-December. U.S. gold futures were up 0.3 per cent to US$1,768.50.
“With gold moving inversely to the US dollar and no other inputs driving the price, gold’s only salvation from here is entirely reliant on a sudden reversal of course by the greenback,” Mr. Halley said.
Currencies
The Canadian dollar was slightly weaker while its U.S. counterpart held near recent highs against a group of world currencies.
The day range on the loonie is 76.54 US cents to 76.85 US cents.
There were no major Canadian economic releases due on Wednesday. May international trade numbers are set to be released Thursday morning followed by June employment figures on Friday.
On world markets, the U.S. dollar index, which tracks the greenback against six counterparts, was flat at around 106.5. The greenback fell 0.3 per cent to 135.43 yen. It hit at the end of June its highest since 1998 at 137.
The euro was flat at 1.0266 against the U.S. dollar after hitting its lowest since December 2002 at 1.0236 on Tuesday, according to figures from Reuters. Concerns about the impact of high energy prices on the euro zone economy have been weighing on the euro.
In bonds, the yield on the U.S. 10-year note was little changed at 2.811 per cent.
More company news
Rogers Communications said on talks with Canada’s antitrust authority to discuss possible remedies to the blocked takeover of Shaw Communications did not result in a resolution. The Commissioner of Competition has blocked the deal, saying it would hamper competition in the country, where telecom rates are the steepest in the world, according to Finnish consultancy firm ReWheel. “Rogers and Shaw are not precluded from continuing discussions with the Commissioner at any time,” the wireless companies said in a statement.
The Paper Excellence Group has signed a deal to buy Resolute Forest Products Inc. in an agreement that values the company at US$2.7-billion. Under the proposal, the parent company of Domtar Corp. will pay US$20.50 per Resolute share, a 64 per cent premium to the share’s closing price on Tuesday. Resolute shareholders will also receive a contingent value right that entitles the holder to a share of future softwood lumber duty refunds on approximately US$500-million of deposits paid by Resolute through June 30.
Ovintiv Inc. has signed a pair of deals to sell portions of its assets located in the Uinta and Bakken Basins for total proceeds of approximately US$250-million. The company says the Uinta Basin assets being sold are mature waterflood assets. The Bakken assets include approximately 88 wells, located mainly in Richland County, Mont.
Amazon has agreed to take a 2-per-cent stake in Just Eat Takeaway.com’s struggling U.S. meal delivery business Grubhub and will offer its Prime members access to the service for one year. The deal is a major relief for Just Eat Takeaway, whose shares have fallen 70% this year as shareholders demanded it sell or find a partner for Grubhub, which it bought just last year for $5.8 billion in shares.
Economic news
(945 am ET) U.S. S&P Global Services/Composite final PMI for June.
(10 am ET) US ISM Services PMI for June.
(10 am ET) U.S. job openings and labor turnover survey for May.
(2 pm ET) U.S. FOMC Minutes from June 14-15 meeting.
With Reuters and The Canadian Press
Terry Weber