Equities
Global markets were mixed after U.S. President Donald Trump said he has firmed up his choice for the next Federal Reserve chairman and announced this morning that it is Kevin Warsh.
Wall Street futures were in the red after a mixed close yesterday, as investors were rattled by the latest earnings reports and worried about whether hefty spending on artificial intelligence would pay off for mega-cap tech companies.
TSX futures followed sentiment lower as commodity prices slid.
In Canada, investors are getting results from Canadian National Railway Co., Imperial Oil Ltd., Brookfield Renewable Partners LP and Brookfield Business Partners LP.
CN raised its dividend as it reported its fourth-quarter profit and revenue rose compared with a year earlier.
Imperial Oil boosted its dividend by 20 per cent and reported its fourth-quarter profit fell compared with a year ago as it saw lower oil prices.
On Wall Street, markets are watching earnings from Exxon Mobil Corp., Chevron Corp., American Express Co. and Verizon Communications Inc.
Warsh “is on record as saying he prefers lower rates”, said Damien Boey, a portfolio strategist at Wilson Asset Management in Sydney. “But the tradeoff that he makes with lower rates is that he wants the Fed to have a smaller balance sheet.
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Overseas, the pan-European STOXX 600 was up 0.61 per cent in morning trading. Britain’s FTSE 100 rose 0.38 per cent, Germany’s DAX gained 0.74 per cent and France’s CAC 40 advanced 0.59 per cent.
In Asia, Japan’s Nikkei closed 0.1 per cent lower, while Hong Kong’s Hang Seng fell 2.08 per cent.
Commodities
Oil prices eased on signs the U.S. may engage in dialogue with Iran over its nuclear program, reducing concern over potential supply disruptions from a U.S. attack.
Brent crude futures slipped 0.3 per cent to US$70.50 a barrel. The March contract expires later today. The more active April contract lost 0.65 per cent to US$69.14.
West Texas Intermediate (WTI) crude dropped 0.6 per cent to US$65.04 a barrel.
“President Trump’s willingness to give diplomacy a chance regarding Iran seemingly makes a U.S. military intervention less likely than yesterday,” said PVM Oil Associate analyst Tamas Varga.
In other commodities, spot gold was down 5.7 per cent to trade at US$5,087.99 an ounce after scaling a record high of US$5,594.82 yesterday. U.S. gold futures for February delivery declined 4.6 per cent to US$5,081.70 an ounce.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 73.76 US cents to 74.17 US cents in early trading. The Canadian dollar was up about 1.42 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, climbed 0.4 per cent to 96.67, reversing some recent weakness.
The euro declined 0.44 per cent to US$1.1920. The British pound gave back 0.45 per cent to US$1.3749.
In bonds, the yield on the U.S. 10-year note was last up at 4.256 per cent.
Economic news
China’s manufacturing PMI
Euro zone’s GDP and unemployment rate: The euro zone economy grew quicker than expected last quarter as consumption and investments kicked into higher gear, offsetting low exports and the exceptional uncertainty emanating from U.S. trade policy, Eurostat data showed. The bloc’s economy grew by 0.3 per cent on the quarter, above expectations for a 0.2 per cent gain.
8:30 a.m. ET: Canada’s monthly real GDP for November. Gross domestic product was flat month-on-month in November, compared with forecasts of a marginal 0.1 per cent growth.
8:30 a.m. ET: U.S. product price index for December.
Also: Ottawa’s Fiscal Monitor for November is expected.
With Reuters and The Canadian Press