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Equities
Canada’s main stock index started lower early Wednesday, tracking broader market sentiment after a hotter-than-expected reading on U.S. inflation. South of the border, key indexes were in the red at the opening bell, weighed down by concerns over price pressures.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 28.42 points, or 0.13 per cent, at 21,566.1.
In the U.S., the Dow Jones Industrial Average fell 20.73 points, or 0.06 per cent, at the open to 36,299.25.
The S&P 500 opened lower by 14.99 points, or 0.32 per cent, at 4,670.26, while the Nasdaq Composite dropped 132.70 points, or 0.84 per cent, to 15,753.84 at the opening bell.
Key for markets on Wednesday will be U.S. inflation data for October.
New figures showed consumer prices rose 0.9 per cent in October, more than the 0.6-per-cent increase markets had been expecting. The annual rate of inflation came in at 6.2 per cent, also ahead of the 5.9-per-cent economists had been forecasting. That was the highest U.S. inflation rate since late 1990.
“October’s inflation report is one superlative after another: the fastest pace in 30 years and many categories seeing historically large price increases,” TD senior economist Leslie Preston said.
“Sometimes you can point to certain outsized gains in specific categories for higher-than-expected inflation, but October’s report had solid price increases nearly everywhere. Price pressures may ease alongside supply chain issues, but it is clear that healthy demand for nearly everything, as the economy recovers from the pandemic, has overwhelmed supply.”
On this side of the border, earnings continue to roll in. CGI, Kinross Gold and Stelco are among the company’s on Wednesday’s calendar.
Excluding one-time items, Montreal-based CGI says it earned $1.40 per diluted share in its most recent quarter, up from $1.22 per diluted share a year ago. Analysts on average had expected an adjusted profit of $1.35 per share, according to estimates compiled by financial markets data firm Refinitiv.
Aurora Cannabis reported a net loss of $11.9-million or 6 cents a share in the latest quarter, down from a loss of $101.4-million or 85 cents in the same period a year earlier. Aurora’s net revenue for the quarter totalled $60.1-million, down from $67.6-million in the same quarter the year prior. The results were released after Tuesday’s close.
On Wall Street, investors will get earnings from Walt Disney Co. after the close of trading. Disney’s Disney+ streaming service and the company’s theme parks, which have now reopened, will be key points of interest for markets.
Overseas, the pan-European STOXX 600 was up 0.02 per cent by midday. Britain’s FTSE 100 rose 0.65 per cent while Germany’s DAX fell 0.04 per cent. France’s CAC 40 was down 0.29 per cent.
In Asia, Japan’s Nikkei fell 0.61 per cent. Hong Kong’s Hang Seng rose 0.74 per cent.
Commodities
Crude prices pared early gains as investors await the latest reading on weekly U.S. inventories.
The day range on Brent is US$84.55 to US$85.50. The range on West Texas Intermediate is US$83.51 to US$.84.97. Brent added 1.6 per cent on Tuesday while WTI gained 2.7 per cent.
Markets will get inventory figures from the U.S. Energy Information Administration later Wednesday morning.
Early Wednesday both Brent and WTI touched their best levels in two weeks after the American Petroleum Institute reported a surprise decline in crude stocks.
The API data, released late Tuesday, showed U.S. crude inventories declined by 2.5 million barrels for the week to Nov. 5. Analysts polled by Reuters were expecting a 2.1 million barrel build.
In other commodities, spot gold was down 0.5 per cent at $1,822.80 per ounce early Wednesday morning, after recording its highest since Sept. 3 in the previous session.
U.S. gold futures eased 0.2 per cent to $1,827.40.
Currencies
The Canadian dollar was firmer in early going while its U.S. counterpart edged higher against a group of currencies.
The day range on the Canadian dollar is 80.33 US cents to 80.59 US cents.
There were no major Canadian releases on Wednesday’s calendar.
“The CAD is managing to swim against the tide of a stronger USD overall this morning and squeeze out a marginal gain,” Shaun Osborne, chief FX strategist with Scotiabank said.
“There does not appear to be any particular development to lift the CAD broadly against its major currency peers. It may simply be that after a period of relative undervaluation, the CAD is catching up a little with relatively firm commodity prices (notwithstanding today’s price action) and the yield premium driven by the Bank of Canada’s policy stance,” he said.
On world markets, the U.S. dollar index, which measures the greenback against six rivals, rose 0.19 per cent to 94.146, after falling from a more than one-year high of 94.634 reached on Friday, according to figures from Reuters.
Against Japan’s yen, the U.S. dollar came off lows last seen since Oct. 11 and rose 0.18 per cent to 113.080 yen.
The euro fell 0.23 per cent to US$1.1569.
Britain’s pound fell 0.18 per cent to US$1.3535 but stood above Friday’s one-month low of US$1.3425.
In bonds, the yield on the U.S. 10-year note was up at 1.476 per cent in the predawn period.
More company news
Alphabet unit Google suffered a setback on Wednesday after Europe’s second-highest court dismissed its challenge to an EU antitrust ruling and U$2.8-billion fine in a major win for EU competition chief Margrethe Vestager. Vestager sanctioned the world’s most popular internet search engine in 2017 for favouring its own price-comparison shopping service to give it an unfair advantage against smaller European rivals.
The Globe’s Steven Chase reports the Canadian operator of the Line 5 pipeline is urging Joe Biden’s administration to embrace its proposal to reroute a controversial Great Lakes crossing deep underground as an example of U.S. “Build Back Better” infrastructure projects. Calgary-based-Enbridge’s 1,038-kilometre pipeline is a crucial petroleum conduit for Ontario and Quebec that carries Alberta and Saskatchewan petroleum through Great Lakes states before re-entering Canada at Sarnia, Ont.
DoorDash Inc said it would buy Finland-based rival Wolt Enterprises OY in an all-stock deal valued at about US$8.09-billion, as the biggest U.S. food delivery firm expands into Europe. DoorDash’s deal would be one of the biggest yet in the space following Just Eat Takeaway.com’s $7.3-billion acquisition of American rival Grubhub and Uber Inc’s $2.65-billion deal for Postmates Inc last year.
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 6.
(8:30 a.m. ET) U.S. consumer prices for October.
(8:30 a.m. ET) U.S. wholesale inventories for September.
With Reuters and The Canadian Press