Equities
Canada’s main stock index slid at Thursday’s opening bell with materials stocks under pressure. On Wall Street, the S&P 500 and Nasdaq also saw early losses as concerns over interest rates continue to rattle global markets.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 89.78 points, or 0.44%, at 20,170.
In the U.S., the Dow Jones Industrial Average rose 119.13 points, or 0.36 per cent, at the open to 32,780.97.
The S&P 500 opened lower by 12.71 points, or 0.32 per cent, at 3,938.68, while the Nasdaq Composite dropped 105.72 points, or 0.93 per cent, to 11,273.77 at the opening bell.
“March Mayhem could see tremendous volatility once we get a look at the February [U.S.] labor market report and possible downward January revisions,” OANDA senior analyst Ed Moya said.
“The February [U.S.] inflation report is also expected to show modest decline, but any hot pricing data could keep the bond market selloff going.”
In Canada, Toronto-Dominion Bank brings earnings season for this country’s biggest lenders to a close, reporting its first-quarter figures this morning.
TD reported adjusted net income of $4.2-billion, or $2.23 per share, in the three months ended Jan. 31, compared with $3.8-billion, or $2.08 per share, a year earlier. Analysts had been expecting adjusted earnings per share of $2.19 in the latest quarter. The bank posted net income of $1.6-billion, or $0.82 a share, down from $3.7-billion, or $2.02 per share, a year ago. TD shares were down about 2 per cent shortly after the opening bell in Toronto.
On Wednesday, Royal Bank and National Bank reported lower first-quarter profit, hit by higher loan-loss provisions, but both also managed to beat analysts’ forecasts. Earlier, CIBC and Bank of Montreal also managed to top market expectations while Bank of Nova Scotia missed analyst’s forecasts.
“In a few ways, [Royal Bank]’s Q1 results followed many of the trends that we’ve observed from the Big Six group this quarter,” Credit Suisse analyst Joo Ho Kim said in a note.
“While trading did provide a boost to the results, that was overshadowed by an even sharper area of focus, which was net interest margins and expenses.”
Elsewhere, Canadian investors also get results Thursday from energy companies Canadian Natural Resources and Crescent Point Energy.
Ahead of the start of trading, Canadian Natural reported adjusted net earnings of $1.96 per share for the quarter ended Dec. 31, compared with average analysts’ estimate of $2.27 per share. Profit in the quarter was hit by the impact of severe winter weather on production.
On Wall Street, shares of Salesforce were up more than 14 per cent in premarket trading after the cloud-based software provider delivered upbeat fourth-quarter results and offered a positive first quarter revenue forecast above analysts forecasts.
On Thursday, results are due from retailer Costco after the closing bell.
Overseas, the pan-European STOXX 600 erased early losses and was up 0.12 per cent by midday. Consumer price inflation in the euro zone eased to 8.5 per cent in February from 8.6 per cent a month earlier. Economists had been looking for a reading closer to 8.2 per cent in the most recent report.
Britain’s FTSE 100 fell 0.04 per cent. Germany’s DAX slid 0.29 per cent while France’s CAC 40 edged up 0.14 per cent.
In Asia, Japan’s Nikkei fell 0.06 per cent. Hong Kong’s Hang Seng ended down 0.92 per cent.
Commodities
Crude prices shook off early losses and turned higher despite figures showing another rise in U.S. weekly inventories.
The day range on Brent was US$83.83 to US$84.85 in the early premarket period. The range on West Texas Intermediate was US$77.23 to US$78.28. Both benchmarks rose about 1 per cent on Wednesday, helped by positive factory data out of China.
“Oil looks like it will stay stuck in a trading range, but the risk are clearly to the upside,” OANDA’s Ed Moya said in a note.
“Some traders might be waiting until we get a better sense of what will be the peak rate after next Friday’s [U.S.] nonfarm payroll report.”
On Wednesday, the U.S. Energy Information administration said crude inventories rose by 1.2 million barrels in the week ending Feb. 24 to 480.2 million barrels. That was the tenth straight week of higher weekly U.S. crude inventories.
In other commodities, spot gold was down 0.2 per cent at US$1,832.60 per ounce by early Thursday morning, after hitting a one-week high in the previous session. U.S. gold futures fell 0.4 per cent to $1,838.30.
“Bullion traders appear to be growing confident that they have priced in peak Fed tightening,” Mr. Moya said.
“A lot of uncertainty remains going forward, but it appears the king dollar rebound might not be as big as some traders were initially thinking.”
Currencies
The Canadian dollar was lower while its U.S. counterpart advanced against a group of world currencies, boosted by a rise in U.S. Treasury yields.
The day range on the loonie was 73.34 US cents to 73.63 US cents ahead of the North American opening bell.
There were no major Canadian economic releases due Thursday.
On world markets, the U.S. dollar index, which measures the U.S. currency against six others - rose 0.39 per cent to 104.79, boosted by a rise in U.S. Treasury yields and after Federal Reserve official Neel Kashkari left the door open to a 50-basis point rate hike at the Fed’s next meeting in March, Reuters reported.
The euro rose 0.9 per cent after a higher-than-forecast reading on euro-zone inflation raised expectations that interest rates in Europe will have to remain higher for longer.
Britain’s pound was down 0.5 per cent to US$1.1964 after Bank of England Governor Andrew Bailey said “nothing is decided” on future rate increases.
In bonds, the yield on the U.S. 10-year note was higher at 4.036 per cent in the predawn period.
More company news
Tesla Inc will cut assembly costs by half in future generations of cars, engineers told investors on Wednesday, but Chief Executive Elon Musk did not unveil when it will debut a much-awaited affordable electric vehicle. Shares were down more than 6 per cent on Thursday morning following the company’s investor day from its Texas headquarters. More than a dozen Tesla executives led by Musk discussed everything from a white-paper plan for the globe to embrace sustainable energy to the company’s innovation in managing its operations from manufacturing to service. -Reuters
Top U.S. electronics retailer Best Buy Co Inc on Thursday joined peers with a cautious forecast for annual earnings as uncertainty over the U.S. economic outlook tempers expectations for a recovery in discretionary products demand.-Reuters
Macy’s Inc forecast full-year profit largely above Wall Street estimates on Thursday, as the department store operator looks to cut back on promotions to protect its margins. Shares of the company rose about 11 per cent in early trading in New York. -Reuters
Economic news
Euro zone CPI and jobless rate
(8:30 a.m. ET) U.S. initial jobless claims for week of Feb. 25.
(8:30 a.m. ET) U.S. productivity for Q4.
With Reuters and The Canadian Press
Terry Weber