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Equities
Canada’s main index slid at the start of trading Thursday with energy shares tracking crude prices lower. On Wall Street, indexes pulled back slightly from record highs as investors await remarks from Federal Reserve chair Jerome Powell at a symposium at week’s end.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 21.91 points, or 0.11%, at 20,565.41.
In the U.S., the Dow Jones Industrial Average rose 44.2 points, or 0.12%, at the open to 35,449.68. The S&P 500 fell 2.4 points, or 0.05%, to 4493.75, while the Nasdaq Composite dropped 16.7 points, or 0.11%, to 15,025.166 at the opening bell.
Attention continues to focus on the Fed’s Jackson Hole symposium and remarks from the Fed chair, due on Friday. Investors are hoping for an indication of when the powerful central bank will begin tapering bond purchases.
“It’s still difficult to envisage that anything he [Jerome Powell] says will change the markets outlook significantly on the timing of a taper,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“The picture on that is more likely to become clearer in the aftermath of next week’s payrolls report.”
Markets got a look at the health of the U.S. job market with the release of weekly jobless claims figures before the start of trading. The U.S. Labor Department said claims for initial state unemployment totalled 353,000, roughly inline with market forecasts.
In this country, earnings from the big banks conclude with results from Canadian Imperial Bank of Commerce and Toronto-Dominion Bank.
TD posted net income excluding one-off items of $3.63-billion, or $1.96 per share, in the three months ended July 31, compared with $2.33-billion, or $1.25, a year earlier. Analysts had expected $1.92 a share, according to IBES data from Refinitiv.
Excluding one-time items, CIBC reported net income of $1.81-billion, or $3.93, in the three months ended July 31, compared with $1.24-billion, or $2.71 per share, a year earlier. Analysts had expected income of $3.41 a share, according to IBES data from Refinitiv.
Shares of both banks were down slightly in early trading in Toronto.
So far, banks have reported profits ahead of analysts forecasts for the third quarter. On Wednesday, Royal Bank and National Bank both posted higher profits as they recovered big sums of money from reserves against loan losses as the economic recovery takes hold.
Overseas, the pan-European STOXX 600 was down 0.28 per cent by midday. Britain’s FTSE 100 slid 0.25 per cent. Germany’s DAX and France’s CAC 40 fell 0.45 per cent and 0.14 per cent, respectively.
In Asia, Japan’s Nikkei closed up 0.06 per cent. Hong Kong’s Hang Seng fell 1.08 per cent.
Commodities
Crude prices were down for the first session this week as concerns about the impact of the spread of the Delta variant on demand weighed on sentiment.
The day range on Brent is US$70.33 to US$71.11. The range on West Texas Intermediate is US$67.34 to US$68.15.
On Wednesday, the U.S. Energy Information Administration reported that U.S. crude inventories fell for a third straight week, although some details gave markets cause for concern.
“The headline draw was welcomed news but a steep drop in crude exports and lackluster jet fuel demand prevented prices from extending gains,” OANDA senior analyst Ed Moya said.
In other commodities, gold prices were weaker as the U.S. dollar ticked higher.
Spot gold fell 0.3 per cent to US$1,784.82 per ounce, while U.S. gold futures fell 0.3 per cent to US$1,785.00.
“Friday [when the Fed chair speaks] will be a make-or-break moment for gold bulls, but the narrative post the last policy meeting suggests Powell will likely avoid making any firm commitments about the timing of tapering, but confirm it will be announced before the end of the year,” Mr. Moya said.
Currencies
The Canadian dollar was down in early going as its U.S. counterpart edged higher against a group of world currencies, although it still remained not far from its lowest point in a week.
The day range on the loonie is 79.19 US cents to 79.47 US cents.
There were no major Canadian releases on the calendar for the day.
“The CAD is down fractionally on the session, in line with its G10 peers, but is showing a bit less sensitivity to the risk backdrop than the AUD and NZD,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“We note that less favourable US-Canada yield spreads across the curve do leave the CAD a little more exposed and suggest less scope for gains versus the USD at present, however.”
“FX is again trading in narrow ranges,” RBC chief currency strategist Adam Cole said in an early note.
The U.S. dollar index, which measures the currency against six rivals, edged up 0.08 per cent to 92.891, but still close to Thursday’s low of 92.801, a level not seen since Aug. 17, according to figures from Reuters.
Against the euro, the U.S. dollar was little changed at US$1.1771, after touching a one-week low of US$1.1775 the previous day. The U.S. dollar ticked up 0.15 per cent to 110.16 yen.
More company news
Business software maker Salesforce.com Inc beat Wall Street estimates for quarterly revenue on Wednesday, as the pandemic-led shift to hybrid work fueled demand for its cloud-based software. Revenue in the second quarter rose 23% to $6.34-billion. Analysts on average expected revenue of $6.24-billion, according to IBES data from Refinitiv.
Dollar General Corp reported a smaller-than-expected fall in quarterly same-store sales, as government stimulus checks and advance child tax credits boosted consumer spending at its stores. Same-store sales fell 4.7% in the second quarter ended July 30, beating analysts’ average estimate of a 5.1% drop, according to IBES data from Refinitiv.
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week of Aug. 21.
(8:30 a.m. ET) U.S. real GDP and GDP deflator for Q2.
With Reuters and The Canadian Press