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Equities
Canada’s main stock index touched a record high early Thursday, buoyed by positive global sentiment and rising crude prices ahead of a meeting of OPEC+ members. In the U.S., the tech-heavy Nasdaq almost hit record levels in the wake of news that the Federal Reserve would begin tapering its bond-buying program later this month.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 80.71 points, or 0.38 per cent, at 21,345.81.
In the U.S., the Dow Jones Industrial Average fell 50.12 points, or 0.14%, at the open to 36,107.46.
The S&P 500 opened higher by 2.36 points, or 0.05%, at 4,662.93, while the Nasdaq Composite gained 38.16 points, or 0.24%, to 15,849.74 at the opening bell.
On Wednesday, the Fed said it would begin trimming its monthly bond purchases this month but also continued to suggest that inflationary pressures are likely “transitory” and probably won’t require a faster increase in interest rates.
“How the reality of the taper plays out over the next few months will be interesting,” OANDA senior analyst Jeffrey Halley said. “[Fed chair Jerome] Powell said something along the lines of inflation is still transient, but it could be transient for longer than expected.
“A rise in U.S. yields over the next couple of months as the taper really gets going should continue to keep the U.S. dollar in the driver’s seat, while hypoxia inducing equity valuations may find the altitude challenging, particularly if consumers start pushing back on pricing increases.”
On Thursday morning, U.S. investors got the weekly reading on jobless claims ahead of Friday’s key nonfarm payrolls report. The report showed that claims for initial unemployment benefits last week totalled 269,000, fewer than the 275,000 analysts had been expecting. Canadian jobs numbers for October will also be released Friday morning.
In this country, earnings continue with results from BCE Inc.
On an adjusted basis, the telecom giant says it earned 82 cents per share, up from an adjusted profit of 79 cents per share a year ago. That matched the average analyst estimate compiled by financial markets data firm Refinitiv.
Canada’s biggest insurers reported results after Wednesday’s close with both Manulife Financial and Sun Life Finance posting a rise in third-quarter profits.
Sun Life topped analysts’ expectations. Underlying profit at Sun Life was $902-million, or $1.54 a share, in the three months ended Sept. 30, from $842-million, or $1.44, a year earlier. Analysts had expected $1.52.
Core earnings at Manulife, meanwhile, rose to $1.5 billion, or 76 cents a share, in the three months ended Sept. 30, from $1.45-billion, or 73 cents, a year earlier. Analysts had expected 79 cents.
Lightspeed shares fell nearly 30 per cent early trading in Toronto after the company reported a loss of US$59.1-million in the latest quarter as revenue nearly tripled. The Montreal-based company says the loss amounted to 43 cents per diluted share for the quarter ended Sept. 30 compared with a loss of US$19.5-million or 20 cents per diluted share in the same quarter last year. Revenue totalled US$133.2-million, up from US$45.5-million a year ago, pushed higher by organic growth and acquisitions.
Overseas, the pan-European STOXX 600 was up 0.46 per cent by midday. Britain’s FTSE 100 gained 0.47 per cent. Early Thursday, the Bank of England held steady, defying expectations by some in the markets that it would hike rates.
Germany’s DAX and France’s CAC 40 advanced 0.59 per cent and 0.38 per cent, respectively.
In Asia, Japan’s Nikkei ended up 0.93 per cent. Hong Kong’s Hang Seng gained 0.80 per cent.
Commodities
Crude prices rose in early going as investors await the outcome of a meeting of OPEC members and their allies, which is expected to result in the current production plan being kept unchanged.
The day range on Brent is US$81.07 to US$82.94. The range on West Texas Intermediate is US$79.74 to US$81.41.
A Reuters report, citing OPEC sources, says the group is expected to stick to plans to raise crude output by 400,000 barrels a day at its meeting Thursday, despite pressure from the United States to boost output to offset rising prices.
“OPEC is under a growing pressure from the US, Japan and others to boost supply to help easing the global energy crisis,” Swissquote senior analyst Ipek Ozkardeskaya said in an early note.
“There is little chance that Saudis will give in to that pressure in my opinion, but there is still hope to see them increase supply by a little bit more than the actual 400,000 barrels per day, to make a little bit more money and help us spend a better winter, without of course letting the prices fall by much.”
Gold prices edged higher after touching their lowest level in three weeks during the previous session in the wake of the Fed decision.
Spot gold rose 0.4 per cent to US$1,776.99 per ounce, after touching its lowest since Oct. 13 on Wednesday. U.S. gold futures gained 0.7 per cent to $1,775.60.
Currencies
The Canadian dollar was modestly weaker as its U.S. counterpart recouped some of the previous session’s losses against a group of world currencies.
The day range on the loonie is 80.57 US cents to 80.81 US cents.
“The CAD is marginally weaker though overnight trade but we expect the CAD to hold up well against a generally stronger USD and outperform against its major currency peers,” Shaun Osborne, chief FX strategist with Bank of Nova Scotia, said.
“The Bank of Canada is well ahead of the Fed in the tapering process and higher interest rates are coming sooner to Canada than the US; short-term yield spreads are little changed in the wake of the FOMC meeting.”
Canadian investors got a reading on September international trade before the start of trading. Statistics Canada said this county’s trade surplus rose to $1.9-billion from $1.5-billion a month earlier.
On world markets, the U.S. dollar index rose 0.15 per cent early Thursday after declining 0.25 per cent on Wednesday.
Britain’s pound was last at US$1.3660, down from its week high of US$1.3698 hit in early Asian hours Thursday, according to figures from Reuters.
The euro, which had also climbed on Wednesday, gave up some of its gains and stood at US$1.15932.
The Australian dollar rose slightly to US$0.7453, but still had more ground to cover to recoup the 1.2-per-cent decline seen earlier this week after the Reserve Bank of Australia struck a dovish stance in its latest policy announcement.
In bonds, the yield on the U.S. 10-year note was unchanged at 1.579 per cent in the early predawn period.
More company news
Canadian Natural Resources Ltd posted a rise in third-quarter profit on Thursday, buoyed by a recovery in oil demand and higher output. On an adjusted basis, the company posted a profit from operations of $2.1-billion, or $1.77 per share, in the quarter ended Sept. 30, compared with $135-million, or 11 cents per share, in the prior three-month period.
Barrick Gold Corp, reported on Thursday an 18-per-cent drop in third-quarter profit from the second, hurt by weaker gold prices. Adjusted earnings fell to $419-million, or 24 cents per share, in the quarter ended Sept. 30, from $513-million, or 29 cents per share, in the second quarter.
Maple Leaf Foods Inc. said it is reassessing its plant protein investments as it reported a third-quarter profit of $44.5-million. CEO Michael McCain says the company is seeing a marked slowdown in the plant-based protein category performance which may suggest systemic change in the extremely high growth rates expected by the industry. He says that given the performance, the company is conducting a review which will either affirm or adjust its strategies and investment thesis going forward.
Moderna Inc cut its 2021 sales forecast for its COVID-19 vaccine by as much as $5-billion, as it struggles to ramp up production of its two-dose inoculation, sending its shares down nearly 11 per cent in premarket trading. The company’s sales target cut is in sharp contrast to that of larger rival Pfizer Inc, which earlier this week raised its sales forecast for its shot. Moderna’s deliveries have been uneven as the company and its contract manufacturers strive to expand production and bottling of the shots to meet unprecedented demand from countries.
Economic news
(8:30 a.m. ET) Canada’s merchandise trade balance for September.
(8:30 a.m. ET) U.S. initial jobless claims for week of Oct. 30.
(8:30 a.m. ET) U.S. productivity for Q3.
(8:30 a.m. ET) U.S. goods and services trade deficit for September.
Also: OPEC+ meeting
With Reuters and The Canadian Press