What every Canadian investor needs to know today: TSX starts up, Wall Street muted ahead of inflation data

Equities

Canada’s main stock index opened higher Monday with a rebound in crude prices helping lift energy stocks. On Wall Street, key indexes were muted at the start of trading with markets awaiting key inflation figures later in the week.

At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 66.86 points, or 0.33 per cent, at 20,608.89.

In the U.S., the Dow Jones Industrial Average rose 40.77 points, or 0.12 per cent, at the open to 33,715.15.

The S&P 500 opened higher by 0.73 points, or 0.02 per cent, at 4,136.98, while the Nasdaq Composite dropped 3.73 points, or 0.03 per cent, to 12,231.68 at the opening bell.

“The [U.S.] labor market is showing signs of resilience, but now the focus shifts back to inflation, with a close eye staying on the banking space,” OANDA senior analyst Craig Erlam said in a note.

“The banking system does not look ‘sound and resilient’ as more banks come under stress. U.S. regulators will eventually be forced to act as the banking crisis worsens and that could mean the further unwinding of more banks.”

U.S. inflation figures, measured by the consumer price index, are due on Wednesday morning. Mr. Erlam said the report is likely to show that the disinflation process is starting to lose momentum, which could delay bets on when the Federal Reserve could cut rates.

“Headline inflation is expected to remain stuck at 5 per cent, which is the slowest pace in almost 2 years,” he said.

“The month-over-month reading is expected to rise from 0.1 per cent to 0.4 per cent. Core inflation might only slow a bit, but that should start to fall more quickly in the coming months as the housing lag will better reflect softening rent and home prices.”

Canadian inflation figures are due the following week.

Elsewhere, Canadian investors continue to see corporate earnings rolling in with energy giant Suncor scheduled to report this evening.

Some of the country’s biggest insurers report later in the week with Manulife posting results after the close of trading on Wednesday. Sun Life Financial reports on Thursday.

Canadian Tire releases results on Thursday morning. Last week, the retailer announced plans to rebrand more than 200 fuel stations under the Petro-Canada banner.

On Friday, Air Canada will report its first-quarter results. Last week, the carrier raised its earnings outlook, citing strong demand and lower fuel prices.

The Globe’s Eric Atkins reports this morning that Canada’s airline industry says its ready for a busy summer travel season but experts caution a labour shortage and airfare inflation could be complicating factors.

Overseas, the pan-European STOXX 600 was up 0.38 per cent by afternoon. Germany’s DAX advanced 0.07 per cent. France’s CAC 40 was up 0.22 per cent. Britain’s FTSE was closed following the weekend coronation. Later in the week, the Bank of England is scheduled to make its latest interest rate decision.

In Asia, Japan’s Nikkei fell 0.71 per cent. Hong Kong’s Hang Seng added 1.24 per cent.

Commodities

Crude prices were up in early trading as stronger-than-expected jobs figures last week helped ease concerns about the U.S. economy despite linger recession fears.

The day range on Brent was US$74.95 to US$76.75 in the early premarket period. The range on West Texas Intermediate was US$71.04 to US$72.84.

Both benchmarks saw sharp losses last week with Brent losing more than 5 per cent while WTI ended the week off more than 7 per cent.

“Oil has found a bottom as risk appetite improves as banking turmoil eases and after employment reports from North America showed significant job strength and defied calls of a looming economic slowdown,” OANDA senior analyst Ed Moya said.

He said oil fundamentals for supply remain somewhat bearish, but expectations are for OPEC+ to act on that at next month’s meeting.

“WTI crude seems like it ready to find a home comfortably above the US$70 level, but oversupply fears for now should cap any rallies that get close to the US$75 region,” Mr. Moya said.

In other commodities, gold prices edged up as the U.S. dollar eased.

Spot gold was up 0.2 per cent at US$2,020.80 per ounce early Monday morning. U.S. gold futures also climbed 0.2 per cent at US$2,029.30.

Currencies

The Canadian dollar was higher, trading near 75 US cents in the early premarket period, helped by improved risk sentiment and stronger commodities prices.

The U.S. dollar, meanwhile, was down slightly against a group of world currencies.

The day range on the loonie was 74.19 US cents to 74.92 US cents in the predawn period.

“The Canadian dollar rallied over 1 per cent last week, with the entire move coming on the back of Friday’s strong risk-on session,” Benjamin Reitzes, Managing Director, Canadian Rates & Macro Strategist with BMO, said.

“Oil bounced off its lows, though still finished the week down $5. Interest rate spreads moved sharply in the loonie’s favour, providing the currency with a lift. With little on the Canadian data docket this week, the loonie will be driven by the U.S. data and risk appetite.”

On world markets, the dollar index, which tracks the greenback against six major peers, was down 0.2 per cent at 101.11, according to figures from Reuters.

The euro was up 0.25 per cent at US$1.1047. The currency has rallied nearly 16 per cent from lows seen in September, Reuters reports.

Britain’s pound was slightly higher at hovering at US$1.2652 ahead of the Bank of England rate decision later in the week. The central bank is again expected to raise borrowing costs.

In bonds, the yield on the U.S. 10-year note was down at 3.435 per cent ahead of the North American open.

More company news

Cenovus Energy Inc said on Monday it has shut-in production and brought plants down in some areas of its conventional business, due to wildfires in Alberta. Cenovus, which is one of the country’s top energy producers, said it was working with provincial and municipal agencies to support efforts and staff in the area. A number of other company’s have also outlined how they’ve been affected by the situation.

AltaGas Ltd on Monday named Enbridge Inc’s Vern Yu as the company’s next president and CEO, effective July 1, 2023. Yu will succeed Randy Crawford, who has been AltaGas CEO since 2018. In November, the Canada-based energy infrastructure company said Crawford had informed the board of his plans to step down in the first half of 2023. -Reuters

Tupperware Brands Corp on Monday said it had engaged investment bank Moelis & Co LLC to explore strategic alternatives and advise the company on potential means to improve its liquidity and capital structure, as well as other strategic transactions. -Reuters

Economic news

(10 a.m. ET) U.S. wholesale inventories for March.

(2 p.m. ET) U.S. Fed Senior Loan Officer Opinion Survey for March.

With Reuters and The Canadian Press