Equities
Canada’s main stock index opened higher Friday on gains in materials and financial stocks. On Wall Street, key indexes were also up after further signs of easing inflationary pressures boosted optimism that the Federal Reserve’s rate-hike cycle could be nearing an end.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 123.97 points, or 0.61 per cent, at 20,509.44.
In the U.S., the Dow Jones Industrial Average rose 160.77 points, or 0.46 per cent, at the open to 35,443.49.
The S&P 500 opened higher by 28.34 points, or 0.62 per cent, at 4,565.75, while the Nasdaq Composite gained 149.72 points, or 1.07 per cent, to 14,199.83 at the opening bell.
On Friday, Canadian markets got a reading on the broad health of the economy in May.
Statistics Canada says GDP grew 0.3 per cent in May on a monthly basis, matching market forecasts. The agency says services-producing industries grew in May while goods-producing industries contracted. Looking ahead, however, the agency also said early estimates suggest June will see a contraction of 0.2 per cent.
“For Q2 as a whole, growth appears to be tracking around a 1-per-cent annualized pace, which is a half point below the Bank of Canada’s monetary policy report forecast,” CIBC senior economist Andrew Grantham said.
“However, there is scope for a rebound in the energy sector to help support activity in Q3.”
In the U.S., meanwhile, traders are watching the June personal consumption expenditures index, which offers the Federal Reserve’s preferred measure of inflation. The index measures prices consumers paid for goods and services and the changes in those prices.
Friday’s report showed that the measure of consumer prices fell last month to its lowest level since March 2021. Prices rose 3 per cent in June from 12 months earlier, down from a 3.8 per cent annual increase in May, though still above the Fed’s 2% inflation target. On a monthly basis, prices rose 0.2 per cent from May to June, up slightly from 0.1 per cent the previous month.
In earnings, Canadian investors will got results from Imperial Oil ahead of the opening bell. The Calgary-based company reported a net income of $675-million, or $1.15 per share, for the quarter ended June 30, down from $2.4-billion or $3.63 per share, a year earlier.
Late yesterday afternoon, TC Energy said it would split into two separate companies, spinning off its liquids pipelines business from its natural gas and low-carbon energy operations. The Calgary-based company announced its plan late Thursday afternoon. Only days earlier, it said it would sell 40 per cent of its two massive Columbia gas transmission systems in the United States to New York-based Global Infrastructure Partners (GIP) for $5.2-billion to help shore up its balance sheet, The Globe’s Emma Graney reports. Shares were down nearly 5 per cent in early trading in Toronto.
In the U.S., Imperial Oil parent Exxon also reports results.
Elsewhere, The Globe’s Stefanie Marotta and Andrew Willis report that, as Laurentian Bank of Canada’s month-end deadline for finding an acquirer nears, Bank of Nova Scotia and Toronto-Dominion Bank have bowed out, shrinking the list of takeover suitors. Scotiabank will not bid for Montreal-based Laurentian, the country’s ninth-largest lender, according to two sources familiar with the matter. It made its final decision on Wednesday, according to one of the sources.
Laurentian stock was down roughly 6 per cent shortly after the opening bell.
Overseas, the pan-European STOXX 600 was down 0.12 per cent in morning trading. Britain’s FTSE 100 edged up 0.14 per cent. Germany’s DAX added 0.21 per cent and France’s CAC 40 was flat.
In Asia, Japan’s Nikkei ended down 0.40 per cent. The Bank of Japan on Friday made its yield curve control policy more flexible and watered down its commitment to defend a cap on long-term interest rates, nodding to growing signs of creeping inflation and the side-effects of prolonged easing, Reuters reported.
Hong Kong’s Hang Seng closed up 1.41 per cent.
Terry Weber