Equities
Global markets sank ahead of a possible U.S. government shutdown as investors eyed key U.S. inflation.
U.S. stock index futures pared some declines after a of the PCE index, the Federal Reserve’s preferred measure of inflation, calmed some investor concerns over fewer rate cuts next year.
Wall Street’s main indexes dropped at the open on fears over high interest rates next year although a cooler-than-expected reading of the PCE index, the Federal Reserve’s preferred measure of inflation, stymied losses.
The Dow Jones Industrial Average fell 0.11 per cent to 42,296.26, the S&P 500 slid 0.43 per cent to 5,842, and the Nasdaq Composite dropped 0.94 per cent to 19,190.042 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.3 per cent lower at 24,332.93 points, on course for its biggest weekly drop in more than a year.
“With [U.S. president-elect Donald] Trump back in the mix there’s every chance we see that [political impasse] extend past the weekend, and possibly even a shutdown, so that will dominate the focus,” Eren Osman, managing director of wealth management at Arbuthnot Latham, said.
“I wouldn’t be going on holiday leaving any big open bets on right now - there’s definitely a propensity for some pretty wild swings in markets.”
European shares came under fire after Trump threatened to impose tariffs if consumers in the region did not increase their purchases of U.S. oil and gas. The pan-European STOXX 600 was down 1.69 per cent in morning trading. Britain’s FTSE 100 fell 1.18 per cent, Germany’s DAX gave back 1.18 per cent and France’s CAC 40 retreated 0.98 per cent.
In Asia, Japan’s Nikkei closed 0.29 per cent lower, while Hong Kong’s Hang Seng declined 0.16 per cent.
Commodities
Oil prices fell on worries about demand growth in 2025, especially in top crude importer China, putting global oil benchmarks on track to end the week down nearly 3 per cent.
Brent crude futures dropped 0.4 per cent to US$72.56 a barrel. West Texas Intermediate (WTI) crude futures eased 0.5 per cent to US$69.06 a barrel.
“Benchmark crude prices are in a prolonged consolidation phase as the market heads towards the year-end weighed by uncertainty in oil demand growth,” said Emril Jamil, senior research specialist at LSEG.
In other commodities, spot gold was up 0.3 per cent at US$2,602.51 an ounce, while U.S. gold futures were 0.4 per cent higher at US$2,617.80.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 69.26 US cents to 69.59 US cents in early trading. The Canadian dollar was down about 2.9 per cent against the greenback over the past month.
Analysts see loonie weakness continuing, as currency hit from multiple angles
The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.42 per cent to 107.96.
The euro rose 0.44 per cent to US$1.0409. The British pound gained 0.46 per cent to US$1.2559.
In bonds, the yield on the U.S. 10-year note was last down at 4.504 per cent.
Economic news
Japan CPI
Euro zone consumer confidence
(8:30 a.m. ET) Canadian retail sales for October, which increased by 0.6 per cent, compared with estimated 0.7 per cent increase from September.
(8:30 a.m. ET) Canadian wholesale trade for November.
(8:30 a.m. ET) U.S. personal spending and income for November. Consumer spending rose 0.4 per cent, compared with estimates of a 0.5 per cent increase.
(8:30 a.m. ET) U.S. PCE price index for November, which rose 2.4 per cent on an annual basis, compared with estimates of 2.5 per cent. On a monthly basis, it rose 0.1 per cent.
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for December.
With Reuters and The Canadian Press