Equities
Canada’s main stock index slid at Thursday’s opening bell with weaker crude prices pressuring energy shares. On Wall Street, key indexes also slipped with traders weighing the impact of faster-than-expected U.S. third-quarter growth on next week’s Federal Reserve rate decision.
At 9:30 a.m., the Toronto Stock Exchange’s S&P/TSX composite index was down 44.07 points, or 0.23 per cent, at 18,903.78.
In the U.S., the Dow Jones Industrial Average fell 18.76 points, or 0.06 per cent, at the open to 33,017.17.
The S&P 500 opened lower by 10.78 points, or 0.26 per cent, at 4,175.99, while the Nasdaq Composite dropped 52.26 points, or 0.41 per cent, to 12,768.97 at the opening bell.
“Surging Treasury yields and mixed earnings have stock investors hitting the sell button.” OANDA senior analyst Ed Moya said in a note.
The yield on the U.S. 10-year note was down 0.038 per cent at 4.915 just after North American markets opened.
Meanwhile, Wall Street traders are paying close attention to new figures on the state of the U.S. economy. Ahead of the market open, a first reading on third-quarter U.S. GDP rose at an annual rate of 4.9 per cent, faster than the 4.5-per-cent rise economists had been forecasting. The third-quarter figure is subject to revision. The latest quarterly gains, which mark the fastest pace of growth in almost two years, came as consumers continued spending despite higher interest rates and continuing price pressures.
The report comes ahead of next week’s Federal Reserve rate announcement.
“Most of the key information in today’s report was already known to the Fed based on the earlier released source data,” CIBC economist Ali Jaffrey said.
“We maintain our view that the resilience of the U.S. economy won’t fade on its on and further tightening of monetary policy will be needed to cool demand.”
On the corporate side, bit tech earnings continue with results due from online retail giant Amazon after the closing bell.
Shares of Facebook parent Meta were down more than 6 per cent in morning trading even after the company topped analysts’ profit and revenue forecasts for the third quarter. However, the company also forecast spending ahead of Wall Street estimates for next year. The results were released after Wednesday’s close.
On Bay Street, Canadian Pacific Railway Ltd. Kansas City Ltd. cut its financial forecasts for the year amid weaker consumer demand and the impact of the B.C. port workers strike earlier this year. In the most recent quarter, diluted earnings per share fell to 84 cents per share from 96 cents per share, below analyst expectations of more than 90 cents per share, according to financial data firm Refintiv. Shares were up nearly 1 per cent in early trading in Toronto.
Overseas, the pan-European STOXX 600 was down 0.84 per cent by midday. Early Thursday, the ECB held rates steady, as expected, ending longest run of interest-rate increases in its 25-year history. The central bank had raised rates at each of its 10 previous meetings. Britain’s FTSE 100 fell 0.73 per cent. Germany’s DAX and France’s CAC 40 lost 1.41 per cent and 0.77 per cent, respectively.
In Asia, Japan’s Nikkei closed down 2.14 per cent. Hong Kong’s Hang Seng lost 0.24 per cent.
Commodities
Crude prices fell as the U.S. dollar firmed and new figures showed a rise in weekly U.S. inventories while traders continue to watch developments in the Middle East.
The day range on Brent was US$89.23 to US$90.40 in the early premarket period. The range on West Texas Intermediate was US$84.50 to US$85.59. Ahead of the North American open, both benchmarks were down roughly 2 per cent.
“Real-time commentary in oil markets when geopolitical headline risk rather than macro is driving the bus is an exercise in futility,” Stephen Innes, managing partner with SPI Asset Management, said in a note.
A report from the U.S. Energy Information Administration showed crude stocks rose 1.4 million barrels last week. Analysts polled by Reuters had expected a more modest rise of about 200,000 barrels.
As well, prices were tempered by a rise in the U.S. dollar, which makes the commodity more expensive for those holding other currencies. The U.S. dollar index was up modestly in the predawn period.
In other commodities, spot gold rose 0.3 per cent to US$1,986.40 per ounce by early Thursday morning. U.S. gold futures edged up 0.1 per cent at $1,997.20.
Currencies
The Canadian dollar slid while its U.S. counterpart edged up against a basket of world currencies.
The day range on the loonie was 72.34 US cents to 72.51 US cents in the early premarket period. The loonie has fallen more than 2 per cent against the U.S. dollar over the past month.
“The BoC [Bank of Canada] more or less delivered on expectations yesterday but around the acknowledgement that tighter policy was acting to slow prices and that the narrow runway to a soft landing was getting narrower, the Bank’s policy statement had a hawkish edge to it,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“The bar to a rate hike is high but the risk of higher rates will persist until there is clearer progress on core inflation,” he said.
On world markets, the U.S. dollar index rose 0.24 per cent to 106.78 in the early premarket period.
The Japanese yen weakened to hit a new one-year low of 150.78 per U.S. dollar and was not far off the 32-year low of 151.94 it touched in October last year, which led to Japanese authorities intervening in the currency market, Reuters reported.
The euro was down 0.2 per cent at US$1.0545 ahead of the ECB policy announcement.
More company news
Precision Drilling Corp. reported a third-quarter profit of $19.8-million, down from $30.7-million a year earlier, as its revenue edged higher. The company says the profit amounted to $1.45 per diluted share for the quarter ended Sept. 30, down from $2.03 per diluted share in the same quarter last year. Revenue for the quarter totalled $446.8-million, up from $429.3-million a year earlier. -The Canadian Press
Ford Motor and United Auto Workers (UAW) union negotiators reached a tentative labor deal after a six-week strike, UAW President Shawn Fain said on Wednesday, a 4-1/2-year contract that would provide a record pay boost. The deal, which needs approval by union leaders and members, would be the first settlement of strikes by 45,000 workers against Ford, General Motors and Chrysler-parent Stellantis that began Sept. 15. -Reuters
United Parcel Service cut its 2023 revenue forecast due to lower e-commerce delivery demand as it fights to win back customers lost during its tumultuous labor talks, sending its shares down 5.3% before the bell on Thursday. The Atlanta company is caught in a profit squeeze in the wake of contract talks with its Teamsters-represented workforce. The world’s biggest package delivery firm now expects full-year revenue between US$91.3-billion and US$92.3-billion, compared with a prior forecast of about US$93-billion. -Reuters
The Globe’s Nicolas Van Praet reports the Canadian government is set to spend as much as $10-billion to buy new military surveillance aircraft from U.S. giant Boeing Co. based on “highly flawed and invalid information,” says Bombardier Inc. chief executive Eric Martel. The move is short-sighted and will hurt the country as Bombardier and other domestic players try to build out their defence potential in the years ahead, he insists.
Mastercard on Thursday reported a rise in third-quarter profit, as strength in consumer spending held up against fears of an economic slowdown. The company reported a profit of US$3.2-billion, or US$3.39 per share, for the three months ended Sept. 30, compared with US$2.5-billion, or US$2.58 per share, a year earlier. -Reuters
Economic news
(8:30 a.m. ET) Canada’s Survey of Employment, Payrolls and Hours for August.
(8:30 a.m. ET) Canadian manufacturing sales for September.
(8:30 a.m. ET) U.S. initial jobless claims for week of Oct. 21.
(8:30 a.m. ET) U.S. real GDP and GDP deflator for Q3.
(8:30 a.m. ET) U.S. goods trade deficit for September.
(8:30 a.m. ET) U.S. wholesale and retail inventories for September.
(8:30 a.m. ET) U.S. durable and core orders for September.
(10 a.m. ET) U.S. pending home sales for September.
(11 a.m. ET) U.S. Kansas City Manufacturing Activity Survey for October.
With Reuters and The Canadian Press