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Equities
Canada’s main stock index opened higher Monday as energy stocks jumped alongside higher crude prices. On Wall Street, both the Nasdaq and S&P 500 started at record levels as investors await the midweek policy decision from the Federal Reserve.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 109.11 points, or 0.52 per cent, at 21,146.18.
In the U.S., the Dow Jones Industrial Average rose 14.09 points, or 0.04 per cent, at the open to 35,833.65.
The S&P 500 opened higher by 5.24 points, or 0.11 per cent, at 4,610.62, while the Nasdaq Composite gained 42.87 points, or 0.28 per cent, to 15,541.26 at the opening bell.
This week, investors will be looking ahead to the Wednesday policy decision from the Fed and an expected announcement that the central bank will begin tapering its massive bond purchases.
“The tapering should be gradual, and that expectation is already priced in,” Ipek Ozkardeskaya, Senior Analyst with Swissquote, said. “Unless we see an aggressive pullback from the Fed, which I doubt, the market reaction should not be too aggressive, as the hawkish expectations have been already being priced in quite aggressively over the past couple of weeks.”
What really matters for the Fed, she said, is the timing of its first rate hike.
“At this point, it looks pretty much unrealistic keeping the rates unchanged until 2023 and the market is already pricing in two 25 basis point rate hikes by the end of 2022,” she said. “According to the activity in Fed funds futures, the first rate hike could come as soon as in June next year.”
In this country, the Rogers Communications saga heads to court with opening arguments set to be heard on Monday in Edward Rogers v. Rogers Communications Inc. at the B.C. Supreme Court. Edward Rogers is battling his sisters and mother for control of the telecom giant’s board of directors.
Later in the week, investors will get jobs numbers on both sides of the border. In Canada, economists are expecting to see the addition of another 50,000 new positions for October. In September, the economy added 157,000 new jobs, putting hiring back at levels seen before the pandemic.
South of the border, economists are expecting U.S. hiring to rise by about 400,000 positions for the month.
Overseas, Britain’s FTSE 100 rose 0.36 per cent by midday. Germany’s DAX and France’s CAC 40 were up 0.72 per cent and 0.75 per cent, respectively.
In Asia, Japan’s Nikkei rose 2.61 per cent. Hong Kong’s Hang Seng lost 0.88 per cent.
Commodities
Crude prices firmed in early going after China released gasoline and diesel reserves amid concerns over tight global supply and investors await a meeting of OPEC members later in the week.
The day range on Brent is US$83.03 to US$84.08. The range on West Texas Intermediate is US$82.74 to US$83.57.
China said in a rare official statement that it had released reserves of the two fuels to increase market supply and support price stability in some regions, according to a Reuters report. Prices initially came under pressure in the wake of the news but firmed by early Monday morning.
Meanwhile, OPEC and its allies are set to meet on Nov. 4 to weigh the group’s current production plan. Analysts aren’t expecting to see any change to OPEC’s plan to add 400,000 barrels a day in December.
In other commodities, gold prices slid, weighed down by a firmer U.S. dollar.
Spot gold fell 0.1 per cent to US$1,781.99 per ounce. U.S. gold futures was steady at US$1,784.10.
Currencies
The Canadian dollar was little changed while its U.S. counterpart held near its best level in more than two weeks against a group of global currencies.
The day range on the loonie is 80.62 US cents to 80.83 US cents.
“Risk appetite is positive — global stocks continue to chug higher today — while crude oil prices are inching up amid signs that OPEC+ will not push more product onto the market, at least not for now, despite appeals to boost output,” Shaun Osborne, chief FX strategist with Scotiabank, said. “Data showed the Canadian economy stumbled somewhat at the end of Q3 but that is not enough to deflect the BoC from its tightening path at this point.”
The big economic release for the Canadian dollar will come Friday with the release of the October jobs numbers.
Alvin Tan, Asia FX strategist with RBC, says that bank’s economists are expecting to see hiring slow, although another 50,000 new jobs are expected to have been added during the month. That would mark a fifth straight month of gains.
“The industry breakdown should show continued improvement on the services side,” he said. “Wages will garner a significant amount of attention given the Band of Canada’s focus on whether what it sees as one-off price rises become ongoing inflation.”
On world markets, the U.S. dollar index, which measures the U.S. currency against six rivals, was little changed at 94.161, holding close to Friday’s peak of 94.302, the best level since Oct. 13.
Britain’s pound was mostly flat at US$1.3680, and earlier slid to US$1.3663 for the first time since mid-October, according to figures from Reuters.
The euro was also little changed at US$1.15605, staying close to Friday’s low of US$1.1535, the weakest since Oct. 13.
More company news
Barclays chief executive Jes Staley is to step down following a probe by British regulators into his ties with convicted sex offender Jeffrey Epstein. Mr. Staley will be replaced as CEO by the bank’s head of global markets C.S. Venkatakrishnan, who on Monday pledged to continue his predecessor’s strategy. Barclays said it was made aware on Friday evening of the preliminary conclusions from the Financial Conduct Authority and the Prudential Regulatory Authority’s investigation into Staley’s characterization to Barclays of his relationship with Epstein and the subsequent description of that relationship in Barclays’ response to the regulator.
Moderna Inc said on Sunday it has been told that the U.S. Food and Drug Administration will require additional time to complete its assessment of the company’s COVID-19 vaccine for use in adolescents aged 12 to 17 years. The FDA informed Moderna that the review may not be completed before January 2022, the company said in a statement, dealing a potential setback to the timing of an emergency use authorization (EUA) for that age group.
Coca-Cola Co said on Monday it would buy the remaining stake in BodyArmor it did not already own for US$5.6-billion, as the soda maker amps up its sports drink portfolio to take on market leader, PepsiCo Inc’s Gatorade.
Economic news
(9:30 a.m. ET) Canada’s Markit manufacturing PMI for October.
(9:45 a.m. ET) U.S. Markit manufacturing PMI for October.
(10 a.m. ET) U.S. ISM manufacturing PMI for October.
(10 a.m. ET) U.S. construction spending for September.
With Reuters and The Canadian Press