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Equities
Canada’s main stock index edged higher at Friday’s open, heading to a second consecutive week of gains, with tech and healthcare stocks giving a boost. Key U.S. indexes also started in positive territory with shares of Johnson & Johnson rising on news the company will split into two units.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 4.64 points, or 0.07 per cent, at 21,586.62.
In the U.S., the Dow Jones Industrial Average rose 42.55 points, or 0.12 per cent, at the open to 35,963.78.
The S&P 500 opened higher by 5.97 points, or 0.13 per cent, at 4,655.24, while the Nasdaq Composite gained 48.34 points, or 0.31 per cent, to 15,752.62 at the opening bell.
Analysts suggest investors are now moving past the sharp jump in U.S. inflation reported earlier in the week.
“With headline [U.S.] CPI at a 31-year high and set to go higher the markets appear to be pricing in the prospect of two US rate rises by the end of next year, a stark shift from where we were only two months ago,” Michael Hewson, chief market strategist with CMC Markets U.K., said.
In this country, investors round out a week of earnings with results from Onex and Héroux-Devtek.
Elsewhere, The Globe’s Nicolas Van Praet reports SNC-Lavalin Group Inc.’s chief executive has called off a largely English-language speech he was set to give next week in Montreal as scrutiny intensifies over the French-language abilities of Quebec’s non-francophone business leaders. In a letter to the chairman of the Canadian Club of Montreal and released by the engineering company late Thursday, Ian Edwards says he has decided to postpone the speech he was set to give to the organization Monday in order to sharpen his French skills first.
On Wall Street, shares of Johnson & Johnson gained more than 1 per cent after the company said it plans to break up into two companies, splitting off its consumer health division from its large pharmaceuticals unit. The company is aiming to complete the planned separation in 18 to 24 months.
Overseas, Japanese industrial giant Toshiba Corp said Friday it will break up into three independent companies by spinning off its core energy and infrastructure and device and storage units. After spinning off the two companies, Toshiba will continue to own its 40.6-per-cent stake in memory chipmaker Kioxia as well as other assets, according to a Reuters report.
In Europe, the pan-European STOXX 600 edged up 0.11 per cent by midday. Britain’s FTSE 100 was down 0.35 per cent. Germany’s DAX and France’s CAC 40 rose 0.15 per cent and 0.34 per cent, respectively.
In Asia, Japan’s Nikkei rose 1.13 per cent. Hong Kong’s Hang Seng gained 0.32 per cent.
Commodities
Crude prices were headed for a weekly decline as a higher U.S. dollar and concerns over the prospect of higher interest rates weigh on energy markets.
The day range on Brent is US$81.54 to US$82.87. The range on West Texas Intermediate is US$80.08 to US$81.53.
Both benchmarks were down more than 1 per cent in early going and looked set for declines for the week.
“The greenback may hold its strength until the expectation of a more hawkish Fed is fully digested by the market, which may not be sooner than mid-2022. Before that happens, a strong dollar can be a possible headwind for higher oil prices,” Leona Liu, analyst at Singapore-based DailyFX, said.
Meanwhile, OPEC and its allies on Thursday cut their world oil demand forecast for the fourth quarter by 330,000 barrels a day from the prior outlook.
“The group also expects US shale to ramp up production more than previously as higher prices encourage further investment,” OANDA senior analyst Craig Erlam said.
“Whether the acknowledgment of higher prices affecting economic activity and demand will encourage the group to increase output more at an upcoming meeting is another thing, especially with some struggling to meet output targets as it is.”
In other commodities, gold prices slid in early going after six days of gains but still looked set for a weekly advance.
Spot gold dropped 0.6 per cent to US$1,851.31 per ounce, after hitting a five-month high on Wednesday. U.S. gold futures were down 0.6 per cent at $1,852.80.
Currencies
The Canadian dollar was weaker as its U.S. counterpart edged up to mark a third session of gains against a group of world currencies.
The day range on the loonie is 79.33 US cents to 79.57 US cents.
“The CAD is feeling the pressure of lower oil prices and modestly narrower spreads, reflecting the upward pressure on U.S. yields following the U.S. inflation data earlier this week,” Shaun Osborne, chief FX strategist with Bank of Nova Scotia, said.
“Crude oil prices are nearing US$80, with a third weekly loss on the near horizon. The 2-year bond spread has been clipped back to about 46 basis points, down from 49bps or so midweek. Along with the USD flexing its muscles generally, the CAD is on the back foot but losses are looking somewhat stretched, we feel.”
There were no major Canadian economic releases due on Friday.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.1 per cent to 95.27, its highest level since July 2020.
The euro slipped back to a 16-month low at US$1.1436, and Britain’s pound dipped to US$1.3354, its weakest level this year, according to figures from Reuters.
In bonds, the yield on the U.S. 10-year note was up at 1.578 per cent. Bond markets in both the U.S. and Canada reopen Friday after being closed during the previous session.
More company news
Onex Corp. reported net earnings of US$602-million in its latest quarter compared with US$501-million in the same quarter last year — a leap of 20.2 per cent propelled by higher asset management earnings. The private equity investment firm says the profit amounted to $6.76 per diluted share for the quarter ended Sept. 30 compared with $5.29 per diluted share in the same period a year earlier.
Héroux-Devtek Inc. saw profits climb but revenue fall last quarter as the landing-gear maker bore the impact of ongoing aerospace turbulence caused by the COVID-19 pandemic. Total revenue decreased to $131.3-million in the company’s second quarter compared to $137.1-million the year before, a drop the company attributes to the negative impact of foreign exchange fluctuations. Héroux-Devtek’s net income nearly doubled in the latest quarter to $7.5-million from $3.8-million in the second quarter of 2020.
Cogeco Communications Inc. says it boosted earnings last quarter and bumped up its financial projections for 2022 to account for its acquisition of an Ohio broadband system. The Montreal-based company says profits attributable to shareholders rose 5.9 per cent to $96.2-million in the quarter ended Aug. 31, from $90.8-million in the same period a year earlier. Revenue increased to $632.7-million in its fourth quarter from $605.2-million a year earlier.
AstraZeneca’s COVID-19 vaccine made a small contribution to earnings in the third quarter and it expects the shot to move to “modest profitability” on new orders after the drug maker on Friday posted $1.05-billion in vaccine sales for the period. The Anglo-Swedish company, which has said will not make a profit from the shot during the pandemic, this week unveiled plans to set up a separate unit for vaccines and antibody treatments to focus on its coronavirus efforts. Total revenue jumped 47 per cent to US$9.74-billion for the three months to September on a constant-currency basis, while core earnings came in at US$1.08 per share, the company said, with the vaccine, Vaxzevria, contributing one cent to the profit.
Economic news
(10 a.m. ET) U.S. University of Michigan Consumer Sentiment for November (preliminary reading)
(10 a.m. ET) U.S. Job Openings & Labor Turnover Survey for September.
With Reuters and The Canadian Press