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Equities
Canada’s main stock index opened little change Tuesday with gains on the energy side being offset by weakness in health-care stocks. South of the border, major U.S. indexes opened up after new inflation figures eased concerns that the Federal Reserve would be forced to tighten stimulus sooner than expected.
At 9:35 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 4.39 points, or 0.02 per cent, at 20,662.02.
In the U.S., the Dow Jones Industrial Average rose 37.27 points, or 0.11 per cent, at the open to 34,906.90.
The S&P 500 opened higher by 10.60 points, or 0.24 per cent, at 4,479.33, and the Nasdaq Composite gained 62.87 points, or 0.42 per cent, to 15,168.45 at the opening bell.
On Tuesday, new figures showed that the annual rate of inflation moderated slightly to 5.3 per cent in August from 5.4 per cent in July. The August figure matched market forecasts. On a monthly basis, U.S. consumer prices rose 0.3 per cent, down from 0.4 per cent a month earlier. That figure was also in line with expectations.
Excluding food and energy, the U.S. consumer price index edged up 0.1 per cent on a monthly basis in August, its slowest pace since February.
Investors were paying close attention to the number, hoping for a clearer indication of how quickly the Federal Reserve is likely to begin tapering bond-purchases. The central bank is set to deliver its next policy announcement on Sept. 22.
“Policymakers have appeared keen to stress that a taper this year remains their preference but there has increasingly been a disconnect between what they’re saying and what the data is doing,” OANDA senior analyst Craig Erlam said.
“If we continue to see softness in the data, will the FOMC still persevere with tapering this year or could they be persuaded to hold off?”
In this country, Statistics Canada said manufacturing sales fell 1.5 per cent in July after rising 3.6 per cent in June.
“It’s one step forward, two step backwards for Canada’s manufacturing sales,” TD economist Omar Abdelrahman said.
“Just as auto sales are starting to show signs of life, other industries are taking a bite out of growth. July’s release adds to the list of recent indicators pointing to a soft patch in Canada’s economy early on in the summer, and adds credence to Statistics Canada’s expectations for a 0.4-per-cent decline in real GDP in July.”
On the corporate side, Apple’s product launch is set for later Tuesday. The tech giant is expected to unveil its latest iPhones along with other products. Reports also suggest the company may also release updates for its AirPods and Apple Watch.
Overseas, the pan-European STOXX 600 was up 0.26 per cent by afternoon. Britain’s FTSE 100 fell 0.16 per cent. Germany’s DAX rose 0.32 per cent. France’s CAC 40 slid 0.21 per cent.
In Asia, Japan’s Nikkei advanced 0.73 per cent. Hong Kong’s Hang Seng fell 1.21 per cent.
Commodities
Crude prices added to the previous session’s gains as traders braced for the potential impact of more bad weather on production in the southern United States.
The day range on Brent is US$73.49 to US$74.23. The range on West Texas Intermediate is US$70.51 to US$71.14.
Early Tuesday, Brent prices hit their highest level in over a month.
Reuters reports that evacuations were underway on Monday from offshore U.S. Gulf of Mexico oil platforms as onshore oil refiners began preparing for Tropical Storm Nicholas, which was heading towards the Texas coast. The region is still recovering from hurricane Ida two weeks ago.
Prices were also underpinned by concerns over supply in Libya. National Oil Corp (NOC) said loading operations at the Libyan oil terminals of Es Sider and Ras Lanuf resumed on Friday, although some reports also suggest protesters continue to cause disruptions.
Gold prices, meanwhile, were little changed.
Spot gold slid 0.1 per cent to US$1,792.31 per ounce, U.S. gold futures were flat at US$1,793.60.
Currencies
The Canadian dollar was steady, trading around 79 US cents, while its U.S. counterpart was little changed against a basket of currencies.
The day range on the loonie is 78.97 US cents to 79.12 US cents.
“Firmer crude should be a modest CAD plus, but higher energy prices are competing with fragile risk sentiment for the CAD’s attention at the moment, absent any strong domestic impulses,” Shaun Osborne, chief FX strategist with Scotiabank, said.
Canadian investors get manufacturing sales figures Tuesday followed by inflation data on Wednesday.
On world markets, the U.S. dollar index stood at 92.596 , pulling back from a two-week high of 92.887 hit on Monday, according to figures from Reuters.
The euro was trading at US$1.1815, rebounding from Monday’s low of $1.17705. That was its lowest level since late August.
Britain’s pound was little changed at US$1.3842. The Australian dollar slid 0.2 per cent to US$0.7353 after the country’s central bank chief, Philip Lowe, again indicated that interest rates were not expected to rise from record lows until 2024.
More company news
Veoneer Inc stuck to its recommendation for Magna International’s bid after receiving an updated, non-binding offer from Qualcomm . Qualcomm on Monday made a formal $37 per share bid for Veoneer in line with the offer announced last month and above Magna’s original $31.25 per share offer. Qualcomm last month offered $4.6-billion to buy Veoneer, an 18.4% premium to a July bid worth around $3.8-billion by Canada’s Magna that had already been accepted by Veoneer’s board.
Enterprise software firm Oracle Corp missed Wall Street expectations for first-quarter revenue, hurt by competition in the cloud computing space. Total revenue rose 4 per cent to US$9.73-billion in the quarter ended Aug. 31. Analysts were expecting revenue of US$9.77-billion, according to IBES data from Refinitiv. The results were released after Monday’s close.
Intuit Inc, known for its small-business accounting and DIY tax-filing softwares, said on Monday it would buy email marketing company Mailchimp for about US$12-billion in a cash-and-stock deal.
Boeing revised up long-term demand forecasts on Tuesday, as a snapback in commercial air travel in domestic markets like the United States tempers the more gloomy industry predictions seen at the height of coronavirus lockdowns last year. The company forecast 43,610 commercial jet deliveries over the next 20 years worth $7.2 trillion, an increase of 500 units from the 43,110 projected a year ago.
The Globe’s Nicolas Van Praet reports Bombardier Inc is bringing to market an updated version of its popular Challenger 350 corporate jet as private air travel soars during the COVID-19 pandemic, betting it can capitalize on surging industry demand after a decade of stagnation.
Economic news
(8:30 a.m. ET) Canada’s manufacturing sales and new orders for July.
(8:30 a.m. ET) U.S. CPI for August.
With Reuters and The Canadian Press