Equities
Canada’s main stock index advanced at Thursday’s opening bell, buoyed by gains in materials shares and positive results from big corporate names like Shopify. On Wall Street, key indexes also started higher after the Federal Reserve held interest rates steady, easing worries about the future path of borrowing costs.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 141 points, or 0.74 per cent, at 19,220.
In the U.S., the Dow Jones Industrial Average rose 183.24 points, or 0.55 per cent, at the open to 33,457.82.
The S&P 500 opened higher by 30.40 points, or 0.72 per cent, at 4,268.26, while the Nasdaq Composite gained 169.02 points, or 1.29 per cent, to 13,230.49 at the opening bell.
On Wednesday, the Federal Reserve kept interest rates unchanged for the second consecutive meeting and noted that the U.S. economy has expanded at a “strong pace”. Markets are now pricing in a 20-per-cent chance of a rate hike at the Fed’s December meeting and a 25-per-cent chance of an increase in January.
“Former New York Fed President William Dudley says [Fed chair Jerome] Powell seems confident that interest rates are high enough to slow down inflation and that confidence certainly didn’t go unnoticed by markets,” Stephen Innes, managing partner with SPI Asset Management, said.
“Indeed, this is about as dovish a take from Chair Powell as the markets will ever get from the typically conservative head of the Fed.”
On Thursday, earnings move back to the forefront. Apple, a bellwether of both consumer demand and the health of the tech sector, reports after the close of trading today.
“We have reservations regarding the results as the iPhone15 sales are not as brilliant as investors hoped they would be, and Huawei is apparently eating Apple’s market share in China,” Swissquote senior analyst Ipek Ozkardeskaya said.
“The good news is that the morose expectations could be easier to beat,” she said, noting Apple’s revenue is expected to fall by about 3 per cent in the latest quarter.
In Canada, BCE, Shopify and Bombardier are among the big names reporting this morning. Markets will also get earnings from Cenovus and Canadian Natural Resources among others.
Shopify said revenue for the three months to September totalled US$1.7-billion, compared with analysts’ estimate of US$1.67-billion, according to LSEG data. Net income attributable to shareholders on a diluted basis was 55 US cents per share, compared with a loss of 12 US cents a year earlier. Shopify’s shares jumped as more than 18 per cent in morning trading in Toronto on the news.
Meanwhile, The Globe’s Alexandra Posadzki reports this morning that BCE’s adjusted earnings amounted to 81 cents per share in the third quarter, down from 88 cents per share during the same period last year. Analysts were expecting adjusted earnings of 81 cents per share, according to the consensus estimate from S&P Capital IQ.
Nutrien’s third-quarter profit fell short of market forecasts amid lower potash prices. On an adjusted basis, the company reported earnings of 35 US cents per share for the three months ended Sept. 30, compared with the average analyst estimate of 66 US cents, according to LSEG data. Nutrien reported after Wednesday’s close.
Overseas, the pan-European STOXX 600 was up 1.57 per cent by early afternoon. Britain’s FTSE 100 added 1.24 per cent. The Bank of England held its key rate at 5.25 per cent.
Germany’s DAX and France’s CAC 40 were up 1.54 per cent and 1.92 per cent, respectively.
In Asia, Japan’s Nikkei ended up 1.81 per cent. Hong Kong’s Hang Seng rose 0.75 per cent.
Commodities
Crude prices were up in early trading after the Federal Reserve opted to keep rates unchanged, boosting risk sentiment in broader markets.
The day range on Brent was US$84.95 to US$86.02 in the early premarket period. The range on West Texas Intermediate was US$80.70 to US$81.85. Both benchmarks were up more than 1 per cent in the early premarket period after choppy trading yesterday that saw crude hit multiweek lows.
“One minute, speculators are running with geopolitical risk; the next, its economic storm clouds billowing on the horizon,” SPI Asset Management’s Stephen Innes said in a note.
“All the while, quant traders are trying to figure out a new supply and demand equilibrium behind market tightness against the backdrop of fresh capital and improved wellhead technology in the Permian basin that’s driving U.S. oil production higher.”
Meanwhile, the U.S. Energy Information Administration says crude stockpiles rose by 0.7 million barrels last week. Markets had been forecasting a higher 1.3-million barrel build.
In other commodities, gold prices edged higher in early trading, supported by a weaker U.S. dollar and a decline in Treasury yields.
Spot gold was up 0.1 per cent to US$1,984.00 per ounce by early Thursday morning. U.S. gold futures gained 0.3 per cent to US$1,993.00.
Currencies
The Canadian dollar advanced while its U.S. counterpart fell broadly on world markets as concerns ease about future U.S. rate hikes.
The day range on the loonie was 72.14 US cents to 72.34 US cents in the predawn period.
On world markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, was down 0.1 per cent at 106.41. The index was down about 0.8 per cent from Wednesday’s high, according to figures from Reuters.
The euro rose 0.3 per cent to US$1.0598. Britain’s pound edged up 0.2 per cent to US$1.2173 ahead of the Bank of England rate decision.
In bonds, the yield on the U.S. 10-year note was lower at 4.713 per cent ahead of the North American open.
More company news
Cenovus Energy’s quarterly profit rose on Thursday, helped by strong demand for crude oil amid tight supplies and higher production. The Calgary, Alberta-based company reported net income of $1.86-billion, or 97 cents per share, for the quarter ended Sept. 30, compared with $1.61-billion, or 81 cents per share, a year earlier. -Reuters
Canadian Natural Resources Ltd said on Thursday President Tim McKay will step down next year and will be succeeded by Scott Stauth. Canada’s largest oil and gas producer also reported lower third-quarter profit despite record production. Crude oil prices rose about 28% in the quarter but still stayed well below the multi-year highs in the same period a year earlier, following Russia’s invasion of Ukraine. Canadian Natural reported a net income of $2.34-billion, or $2.13 per share, for the quarter, down from $2.84-billion or $2.49 per share a year earlier. -Reuters
Barrick Gold Corp beat analysts’ expectations for third-quarter profit on Thursday, as the Canadian gold miner benefited from lower costs and increased production. The Toronto-based company posted adjusted earnings of 24 US cents per share for the quarter ended Sept. 30, while analysts on average had expected 20 US cents, per LSEG data. -Reuters
Peloton Interactive Inc on Thursday forecast second-quarter revenue below Wall Street estimates, anticipating a fall in demand for its exercise equipment as sticky inflation keeps discretionary spending in check. The company said it now expects second-quarter revenue between US$715-million and US$750-million, compared with analysts’ average estimate of US$763.3-million, according to LSEG data. -Reuters
Economic news
Bank of England’s monetary policy announcement
(8:30 a.m. ET) U.S. initial jobless claims for week of Oct. 28.
(8:30 a.m. ET) U.S. productivity and unit labour costs for Q3.
(10 a.m. ET) U.S. factory orders for September.
Also: Ontario’s fall economic statement
With Reuters and The Canadian Press
Terry Weber