Equities
Global markets drifted lower as investors evaluated AI-related concerns, parsed U.S. Federal Reserve meeting minutes and eyed retail bellwether Walmart’s quarterly results.
Wall Street futures were in the red after a tech rally yesterday, driven by Nvidia saying it signed a multiyear deal to sell Meta Platforms millions of artificial intelligence chips.
TSX futures followed sentiment lower after Canada’s main stock market closed at a fresh record high yesterday.
In Canada, investors are getting results from Canadian Tire Corp. Ltd., Cenovus Energy Inc. and Boardwalk REIT.
A walloping start to the winter season contributed to higher fourth-quarter sales for Canadian Tire, as customers came into the stores in search of shovels, boots and other cold-weather necessities, The Globe’s Susan Krashinsky Robertson reports.
Teck Resources beat fourth-quarter profit expectations, helped by a surge in copper prices and production, as the miner advanced its proposed merger with Anglo American.
Cenovus Energy surpassed market estimates for fourth-quarter adjusted profit, helped by higher upstream production.
On Wall Street, markets are watching earnings from Walmart Inc., Deere & Co. and Newmont Corp.
Walmart forecast annual sales and profit below elevated expectations as it enters a new chapter under CEO John Furner. The stock was down about 2.6 per cent in premarket trading.
“Risk assets overall are okay because [investors] read through those Fed minutes,” said Chris Turner, global head of markets at lender ING.
“The Fed’s talking about a resilient U.S. economy which is good for global growth,” he said.
Overseas, the pan-European STOXX 600 was down 0.56 per cent in morning trading. Britain’s FTSE 100 slid 0.54 per cent, Germany’s DAX fell 0.992 per cent and France’s CAC 40 gave back 0.07 per cent.
In Asia, Japan’s Nikkei closed 0.57 per cent higher, while Hong Kong’s Hang Seng remained closed for a holiday.
Commodities
Oil prices were on the rise, driven by increasing concerns over potential military conflict between the United States and Iran as both countries stepped up military activity in the oil-producing region.
Brent futures were up 1.55 per cent at US$71.44 a barrel, while West Texas Intermediate (WTI) crude gained 1.7 per cent to US$66.28. Both benchmarks neared six-month highs.
“Oil prices are rallying as the market becomes increasingly concerned over the potential for imminent U.S. action against Iran,” ING analysts said in a note.
“For oil markets, the concern is clearly what action would mean, not only for Iranian oil supply, but also broader Persian Gulf oil flows, given the risk of disruption to shipments through the Strait of Hormuz.”
In other commodities, spot gold rose 0.2 per cent to US$4,989.09an ounce. U.S. gold futures for April delivery held steady at US$5,008.60.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.93 US cents to 73.16 US cents in early trading. The Canadian dollar was up about 0.58 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, advanced 0.27 per cent to 97.97.
The euro declined 0.26 per cent to US$1.1752. The British pound slid 0.39 per cent to US$1.3441.
In bonds, the yield on the U.S. 10-year note was last up at 4.099 per cent.
Economic news
Japan’s machine tool orders
Euro zone’s consumer confidence
8:30 a.m. ET: Canada’s new housing price index for January. Estimate is a decline of 0.1 per cent from December and down 2.1 per cent year-over-year.
8:30 a.m. ET: Canada’s merchandise trade balance for December, which narrowed to $1.31-billion, compared to an estimated $2.2-billion. Exports grew faster than imports, and Canada’s share of exports to the United Sates dropped to its lowest level on record barring the COVID-19 months.
8:30 a.m. ET: U.S. initial jobless claims for week of Feb. 14, which fell more than expected, consistent with a stabilizing labour market. Claims dropped 23,000 to a seasonally adjusted 206,0000, compared with estimates of 220,000, down 7,000 from the previous week.
8:30 a.m. ET: U.S. goods and services trade balance for December.
8:30 a.m. ET: U.S. advance economic indicators report for December.
10 a.m. ET: U.S. pending home sales for January. Estimate is a gain of 0.2 per cent from December.
With Reuters and The Canadian Press