Canada’s main stock index slid at Tuesday’s opening bell with weaker crude prices weighing on energy stocks. On Wall Street, key indexes also saw modest early declines as traders await tomorrow’s interest rate decision from the Federal Reserve.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 118.46 points, or 0.57 per cent, at 20,496.64.
In the U.S., the Dow Jones Industrial Average fell 34.08 points, or 0.10%, at the open to 34,017.62. The S&P 500 opened lower by 3.77 points, or 0.09%, at 4,164.10, while the Nasdaq Composite dropped 14.58 points, or 0.12%, to 12,198.02 at the opening bell.
Traders are now looking ahead to Wednesday’s rate decision from the Fed. Markets are expecting a quarter point increase, which would be the 10th consecutive move higher by the U.S. central bank over the past year. Investors will also be watching for signals from the bank that it is now preparing to move to the sidelines.
“The Fed will likely be confident banking jitters are fading, but given the recent boost of inflationary pressures, they might hold off signaling they are ready to hold rates steady after one more hike,” OANDA senior analyst Ed Moya said.
“The Fed might choose to remain vigilant and that is something this market is not ready to price in.”
The rate announcement is due at 2 p.m. ET on Wednesday.
Meanwhile, earnings continue to roll in.
Canadian investors got results from Tim Hortons-parent Restaurant Brands International ahead of the opening bell.
Restaurant Brands said total revenue rose to US$1.59 billion in the first quarter, from US$1.45 billion a year earlier. Analysts on average had expected revenue of US$1.56-billion, according to Refinitiv IBES data.
On Wall Street, Pfizer and Uber report this morning. Ford and Starbucks both report their latest quarterly results after the close of trading.
Elsewhere, The Globe reports that BlackBerry Ltd. said in a release late Monday its board is initiating a review of its portfolio of businesses to explore strategic alternatives that “include, but are not limited to, the possible separation of one or more of BlackBerry’s businesses.” The company has hired investment banks Morgan Stanley & Co. and Perilla Weinberg Partners as financial advisers but has not set a timetable for completing the process.
TSX-listed shares of the Waterloo, Ont.-based company were up about 5 per cent shortly after the start of trading.
Overseas, the pan-European STOXX 600 was down 0.46 per cent by midday. Britain’s FTSE 100 was off 0.25 per cent. Germany’s DAX and France’s CAC 40 lost 0.48 per cent and 0.77 per cent, respectively.
In Asia, Japan’s Nikkei ended up 0.12 per cent. Hong Kong’s Hang Seng gained 0.20 per cent. Australia’s central bank surprised markets by raising rates by 25 basis points after holding steady at its April meeting.
Crude prices were choppy in early trading ahead of another expected rate hike by the Federal Reserve this week.
The day range on Brent was US$78.81 to US$79.78 in the early premarket period. The range on West Texas Intermediate was US$75.10 to US$76.11.
Both benchmarks fell by about US$1 a barrel on Monday.
Prices have been hit by weaker-than-expected manufacturing numbers out of China over the weekend as well as expectations that borrowing costs in the U.S. will rise again this week, raising concerns about future economic growth.
Traders will also get the first of two weekly U.S. crude inventory reports later in the session. Analysts polled by Reuters are looking for a third consecutive week of declines, suggesting continued demand.
The first round of numbers come from the American Petroleum Institute this afternoon. More official numbers are released by the U.S. government on Wednesday morning.
In other commodities, gold prices traded in a narrow range.
Spot gold was little changed at US$1,981.79 per ounce by early Tuesday morning, while U.S. gold futures were down 0.1 per cent to US$1,989.80.
The Canadian dollar was weaker in early trading while its U.S. counterpart held relatively steady against a group of world currencies.
The day range on the loonie was 73.65 US cents to 73.92 US cents in the early premarket period.
“Spot moves overnight have taken the edge off the CAD’s advance, likely reflecting the weaker risk backdrop for markets broadly,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“The BoC announced yesterday that Governor [Tiff] Macklem will deliver a fireside chat on the ‘challenges and risks in getting inflation back on target’ Thursday at the Toronto Region Board of Trade...At the very least, the governor will continue to push back on market pricing for rate cuts in Canada later this year.”
There were no major Canadian economic releases due Tuesday.
On world markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, was unchanged at 102.15 early Monday morning as markets await the Fed’s next rate move.
Elsewhere, the euro edged 0.1-per-cent higher against the U.S. dollar to $1.0985, but still near the bottom of its range of the past week, according to figures from Reuters.
The Australian dollar hit a one-week high after the Reserve Bank of Australia delivered a surprise rate increase on Tuesday. The Australian currency rose 1 per cent to just below 67 U.S. cents for the first time since April 25 in the wake of that move, Reuters reported.
In bonds, the yield on the U.S. 10-year note was lower at 3.528 per cent early Tuesday morning.
More company news
The Globe’s Niall McGee reports Teck Resources Ltd.’s biggest shareholder, China Investment Corp., voted against the mining company’s proposed split last week, burying its chances of moving forward on a restructuring that had been years in the planning, a source familiar with the matter said. Vancouver-based Teck last Wednesday announced it was cancelling its plans to separate, after failing to win enough votes from shareholders.
BP made a profit of US$5-billion in the first quarter of 2023, up from the previous three months on the back of strong oil and gas trading, but the company’s shares fell as it slowed a share buyback programme. BP’s results, which beat forecasts, follow a strong showing from rivals including Exxon Mobil and Chevron last week as oil majors continue to benefit from energy prices that remain strong despite some softening since the start of the year. -Reuters
HSBC Holdings reported a 212% increase in quarterly profit on Tuesday, as it benefitted from rising interest rates around the world. Europe’s largest bank posted a pretax profit of US$12.9-billion for the first quarter ended March, versus US$4.2-billion a year earlier. The results were better than the US$8.64-billion average estimate of 17 analysts compiled by HSBC. -Reuters
Pfizer Inc on Tuesday reported first-quarter profit that beat Wall Street estimates, as strong demand for its recently acquired products and pneumococcal vaccines helped offset the impact from declining sales of its COVID-19 products. Excluding items, the U.S. drug maker earned US$1.23 per share for the quarter ended March 31, compared with estimates of 98 US cents, according to Refinitiv estimates. -Reuters
Uber Technologies Inc forecast quarterly core earnings above estimates on Tuesday, after a surge in demand for travel and food delivery helped the U.S. ride-sharing giant report better-than-expected results for the January-March period. Shares of the company rose more than 8 per cent in premarket trading and drove gains of 4 per cent each in those of Lyft Inc and DoorDash Inc, both of which report results on Thursday. -Reuters
(10 a.m. ET) U.S. factory orders for March.
(10 a.m. ET) U.S. Job Openings & Labor Turnover Survey for March.
With Reuters and The Canadian Press