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Equities

Canada’s main stock index opened higher Thursday with energy and materials stocks lending support. Key Wall Street indexes were also positive in early trading with investors looking ahead to tomorrow’s U.S. jobs report.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 36.32 points, or 0.18 per cent, at 20,310.53.

The Dow Jones Industrial Average rose 69.74 points, or 0.19 per cent, at the open to 36,124.17.

The S&P 500 opened higher by 19.50 points, or 0.43 per cent, at 4,568.84, while the Nasdaq Composite gained 83.72 points, or 0.59 per cent, to 14,230.44 at the opening bell.

In Canada, the focus returns to the Bank of Canada with deputy governor Toni Gravelle delivering the central bank’s economic progress report in Windsor this afternoon. Mr. Gravelle’s remarks will be released by the bank just after midday. A day earlier, the Bank of Canada held its key interest rate steady at 5 per cent for the third consecutive meeting.

The Globe’s Mark Rendell reports, however, that the bank, while holding rates steady, warned that it is still prepared to hike again, as it continued to talk tough about inflation in the face of market speculation that rates have peaked and cuts are coming next year.

“The Bank of Canada is firmly in a wait and see mode as upside risks to the outlook are present, albeit low,” Arlene Kish, director of Canadian economics with S&P Global Market Intelligence, said in a note.

“As such, the central bank noted their preparedness to raise interest rates if the economy or inflation needs additional cooling. Otherwise, monitoring of near-term inflation expectations, business pricing behaviors, and wage and core inflation rates will determine the timing of future policy decisions.”

She said S&P Global Market Intelligence continues to forecast the first interest rate cut in July 2024.

On Wall Street, markets continue to wait for Friday’s key November jobs report. On Wednesday, payroll company ADP reported that private hiring in November totalled 103,000 positions last month, below market forecasts.

The Federal Reserve makes its final rate announcement of the year next week and is widely expected to remain on hold, although analysts will be closely watching for signals about the timing of future rate cuts.

“While the government’s jobs report is anticipated to be a decisive factor, the bar for the report to send an unequivocally strong or hawkish message has now been set relatively high,” Stephen Innes, managing partner with SPI Asset Management, said.

On the corporate side, Vancouver-based athleticwear maker Lululemon reports after the close of trading. Laurentian Bank reported fourth-quarter earnings before markets open.

Laurentian reported net income of $30.6-million or 67 cents per diluted share for the quarter ended Oct. 31, down from a profit of $55.7-million or $1.26 per diluted share a year earlier. The bank said the results included a $5.3-million charge related to a mainframe outage and $15.9-million in restructuring and strategic-review related charges.

Overseas, the pan-European STOXX was down 0,31 per cent by midday. Britain’s FTSE 100 slid 0.09 per cent. Germany’s DAX and France’s CAC 40 were down 0.23 per cent and 0.23 per cent, respectively.

In Asia, Japan’s Nikkei fell 1.76 per cent. Hong Kong’s Hang Seng lost 0.71 per cent.

Commodities

Crude prices recouped some lost ground early this morning after touching six-month lows during the previous session amid demand concerns and economic worries.

The day range on Brent was US$74.39 to US$75.21 in the early premarket period. The range on West Texas Intermediate was US$69.28 to US$70.20.

“U.S. crude plummeted 4 per cent yesterday and sank below the US$70-per-barrel mark and Brent slipped below US$75 per barrel,” Swissquote senior analyst Ipek Ozkardeskaya said.

“Momentum traders and falling volumes worsened crude’s recent plunge while OPEC’s latest announcement of output cuts and Saudi’s additional threats that they will extend their solo cut beyond Q1 went totally unheard.”

Sentiment has been tempered by concerns about demand in China, one of the world’s biggest crude consumers, in the wake of a downgrade by ratings agency Moody’s.

As well, figures from the U.S. Energy Information Administration showed that U.S. gasoline inventories rose by 5.4 million barrels last week, far more than analysts had been forecasting. Crude stocks, however, fell 4.6 million barrels last week, more than analysts were expecting.

Gold prices, meanwhile, were up ahead of Friday’s U.S. payrolls data. Spot gold rose 0.4 per cent to US$2,033.47 per ounce by early Thursday morning. U.S. gold futures gained 0.2 per cent to US$2,050.60.

Currencies

The Canadian dollar was steady following the Bank of Canada’s latest rate decision while its U.S. counterpart slid against a group of world currencies but was still not far off recent two-week highs.

The day range on the loonie was 73.47 US cents to 73.62 US cents in the predawn period.

On world markets, the U.S. dollar index, which measures the greenback against a selection of currencies, was down 0.32 per cent at 103.82. The index lost about 3 per cent last week.

Elsewhere, the euro, which has fallen 0.95 per cent this week, was up 0.15% at $1.07795, according to figures from Reuters.

In bonds, the yield on the U.S. 10-year note was slightly higher at 4.146 per cent ahead of the North American opening bell.

More company news

Canadian National Railway Co. says it is acquiring Iowa Northern Railway, pending regulatory review. In a press release, CN says it has signed and closed an agreement to acquire the railway, which serves upper Midwest agricultural and industrial markets. The Iowa railway operates approximately 275 track miles in Iowa connecting to CN’s U.S. rail network. Financial terms were not released. -The Canadian Press

McDonald’s is set to test a smaller-format concept store called “CosMc’s”, which will sell cold beverages including flavored iced teas and slushes, as the fast-food giant charts out an ambitious growth plan. The first CosMc’s location will open in Bolingbrook, Illinois, this week as part of a limited test run, the company said on Wednesday during its investor day. McDonald’s aims to open about 10 pilot stores by the end of 2024, with the rest set to come up in Texas, CEO Chris Kempczinski said. The company will study the results from the test locations for at least one year, he added. -Reuters

Economic news

(8:30 a.m. ET) Canadian building permits for October.

(8:30 a.m. ET) U.S. initial jobless claims for Dec. 2.

(10 a.m. ET) U.S. wholesale trade for October.

(12 p.m. ET) U.S. flow of funds for Q3.

(12:15 p.m. ET) Bank of Canada Deputy Governor Toni Gravelle speaks at the Windsor-Essex Regional Chamber of Commerce.

(3 p.m. ET) U.S. consumer credit for October.

With Reuters and The Canadian Press

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