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Equities
Canada’s main stock index hit a record high early Wednesday helped by gains in energy and financial stocks. On Wall Street, the tech-heavy Nasdaq also managed a fresh peak while the broader market was treading water ahead of a key Federal Reserve symposium later in the week.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 31.33 points, or 0.15 per cent, at an all-time high of 20,579.09.
The energy sector rose 0.2 per cent, while financial stocks added 0.3 per cent.
In the U.S., the Dow Jones Industrial Average rose 22.5 points, or 0.06 per cent, at the open to 35388.77. The S&P 500 rose 4.2 points, or 0.09 per cent, to 4490.45, while the Nasdaq Composite rose 19.2 points, or 0.13 per cent, to 15039.027 at the opening bell.
Global markets continue to await the start of the Federal Reserve’s annual Jackson Hole symposium, which will be held in a virtual format this year. The summit begins on Thursday and Fed chair Jerome Powell is scheduled to speak on Friday.
“We are just a day away from Powell’s Jackson Hole speech and the market optimism is everywhere,” Ipek Ozkardeskaya, senior analyst with Swissquote, said.
“U.S. stocks, Chinese stocks, tech stocks, energy stocks. There is an undeniable and a blind optimism in the U.S. stock markets.”
She noted that Bank of America research shows that the number of new S&P record highs in 2021 is on track to be the second most in a calendar year since 1928.
“And, the calendar year is not over just yet, we have four more months to go to beat all the records that the world has ever known with the current investor optimism,” she said.
In this country, bank earnings continue with results from Royal Bank of Canada and National Bank.
In the most recent quarter, RBC reported profit of $4.3-billion, or $2.97 per share, in the three months ended July 31, up from $3.2-billion, or $2.20 per share, a year ago Adjusted for certain items, RBC said it earned $3.00 per share, compared to an average estimate of $2.71 among analysts, according to Refinitiv.
National Bank, meanwhile, earned $839-million, or $2.36 per share, compared with $602-million, or $1.66 per share, in the same quarter last year. On average, analysts expected earnings per share of $2.13, according to Refinitiv.
On Tuesday, Bank of Montreal and Bank of Nova Scotia both reported surging third-quarter profits that topped analysts’ forecasts. The Globe’s James Bradshaw reports that the gains came as a glut of savings consumers and businesses have accumulated in the COVID-19 pandemic helped drive down losses on loans, but extra cash in deposit accounts also kept a lid on new client borrowing.
Overseas, the pan-European STOXX 600 rose 0.04 per cent by midday. Britain’s FTSE 100 rose 0.17 per cent. Germany’s DAX slid 0.16 per cent and France’s CAC 40 added 0.19 per cent.
In Asia, Japan’ Nikkei closed down 0.03 per cent. Hong Kong’s Hang Seng slid 0.13 per cent.
Commodities
Crude prices steadied following two days of gains after weekly U.S. inventory figures showed a smaller-than-forecast decline in stocks.
The day range on Brent is US$70.52 to US$71.20. The range on West Texas Intermediate is US$67.00 to US$67.66.
Both benchmarks are up about 8 per cent on the week, reclaiming most of the losses seen in the prior week.
The latest moves came as the American Petroleum Institute reported that crude inventories fell by 1.6 million barrels last week, while gasoline inventories declined by 1 million barrels.
Analysts had been looking for a drop in crude inventories of about 2.7 million barrels and a decline in gasoline stocks of about 1.6 million barrels.
More official figures will be released later Wednesday morning by the U.S. Energy Information Administration.
“The oil price snapback will only continue if the headlines continue to support the narrative that several countries are starting to have a much better handle with the delta variant,” OANDA senior analyst Ed Moya said.
“The oil market is still very tight and with Chinese demand picking up, crude prices only have one way to go after an overdone selloff.”
In other commodities, gold prices fell as the U.S. dollar ticked higher and broader risk sentiment remained positive.
Spot gold was down 0.5 per cent at US$1,793.50 per ounce, while U.S. gold futures fell 0.7 per cent to US$1,795.90.
“Gold prices continue to go nowhere as investors eagerly Fed Chair Powell’s next chess move over how to delicately signal readiness over tapering asset purchases,” Mr. Moya said.
Currencies
The Canadian dollar was modestly weaker as its U.S. counterpart gained against a group of world currencies, trading above its one-week low.
The day range on the loonie is 79.20 US cents to 79.47 US cents.
“A better night for USD has seen most currencies retracing within yesterday’s ranges,” Elsa Lignos, global head of FX strategy with RBC, said in an early note.
Ahead of the open, Statistics Canada said early estimates suggest July wholesale sales fell 2 per cent. The decrease reflects lower sales in the building material and supplies subsector, the agency said.
On world markets, the U.S. dollar index, which tracks the currency against six rivals, edged up 0.07 per cent to 92.981, after dipping to 92.804 the previous day for the first time since Aug. 17, according to figures from Reuters.
The U.S. dollar gained 0.06 per cent to 109.745 yen, near the middle of the trading range since early July.
Against the euro, the U.S. dollar fell about 0.1 per cent to US$1.1744, remaining close to the one-week low of US$1.17655 touched overnight.
Britain’s pound traded flat at US$1.3730.
More company news
Nordstrom Inc exceeded quarterly sales estimates, as Americans bought more apparel and footwear at its stores after coronavirus-driven restrictions eased. Revenue rose to $3.66-billion in the second quarter, from $1.86-billion a year earlier. Analysts on average expected a figure of $3.36-billion, according to Refinitiv IBES data. The results were released after Tuesday’s close.
Imperial Oil Ltd, one of Canada’s biggest oil producers and refiners, on Wednesday outlined a plan to process vegetable oil into renewable diesel at its 191,000-barrel-per-day Strathcona refinery. The project, which still requires final approval, is part of majority-owner Exxon Mobil’s goal of producing more than 40,000 barrels per day of low-emissions fuels by 2025.
Economic news
(8:30 a.m. ET) Canadian wholesale trade for July.
(8:30 a.m. ET) U.S. durable goods orders for July.
With Reuters and The Canadian Press