What every Canadian investor needs to know today - The Globe and Mail

Equities

Canada’s main stock index slid at the start of trading Friday after new figures showed a modest decline in retail sales in November but also forecast a stronger showing the following month. On Wall Street, key indexes notched gains at the opening bell with Netflix shares showing strength on the back of subscriber growth in the latest quarter.

At 9:35 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 43.46 points, or 0.21 per cent, at 20,297.98.

The Dow Jones Industrial Average rose 28.90 points, or 0.09 per cent, at the open to 33,073.46.

The S&P 500 opened higher by 10.19 points, or 0.26 per cent, at 3,909.04, while the Nasdaq Composite gained 72.40 points, or 0.67 per cent, to 10,924.66 at the opening bell.

“It’s been another eventful week and one that serves to remind us that, while there may be more sources of optimism this year, compared with last, it’s going to be a very bumpy ride,” OANDA senior analyst Craig Erlam said.

In Canada, investors got a better-than-forecast reading on November retail sales. Statistics Canada said early Friday that sales fell 0.1 per cent for the month. That’s better than the 0.5-per-cent decline the agency had initially forecast. Sales were down in six of 11 subsectors, representing 47.4 per cent on retail trade. The agency also gave an early look at December sales, forecasting an increase of 0.5 per cent for that month.

“Retail sales came in better than expected in November, with the headline decrease helped by higher prices as volumes posted a larger drop,” BMO economist Shelly Kaushik said.

“Still, a positive flash estimate for December suggests sales recovered in both nominal and real terms to close out the year, as Canadian consumers continue to prove resilient in the face of aggressive rate hikes.”

On Wall Street, shares of streaming giant Netflix were up nearly 8 per cent in morning trading after the company added 7.66 million subscribers in the fourth quarter, topping Wall Street forecasts of 4.57 million. Net income fell to US$55-million or 12 US cents a share, from US$607-million or US$1.33 a share a year earlier. Revenue rose 1.9 per cent to US$7.85-billion, in line with expectations.

As well, Netflix co-founder Reed Hastings announced he will step down as chief executive, handing the reins to his long-time partner and co-CEO, Ted Sarandos, and the company’s chief operating officer, Greg Peters.

Overseas, the pan-European STOXX 600 was up 0.26 per cent by midday. Britain’s FTSE 100 gained 0.16 per cent. Germany’s DAX and France’s CAC 40 were up 0.44 per cent and 0.55 per cent respectively.

In Asia, Japan’s Nikkei closed up 0.56 per cent. Hong Kong’s Hang Seng advanced 1.82 per cent.

Commodities

Crude prices were up and on track for a weekly gain as China’s reopening continues to fuel optimism over demand.

The day range on Brent was US$86.14 to US$87.13 in the predawn period. The range on West Texas Intermediate was US$80.45 to US$81.33. Both benchmarks were headed for a weekly gain of more than 1 per cent ahead of the North American open.

“Many traders believe that it is highly likely that we are going to see higher demand coming from China as it continues to dismantle its COVID policies,” AvaTrade’s Naeem Aslam said in a note.

“The crude inventory data also shows that there are little to no chances of inventory build-up which is another encouraging sign for the price action.”

In other commodities, gold prices hit their best levels since last April and looked set for a fifth straight week of gains as markets weigh the future path for rate hikes by the Federal Reserve.

Spot gold was little changed at US$1,931.59 per ounce by early Friday morning. Prices rose 0.6 per cent this week so far.

U.S. gold futures rose 0.5 per cent to US$1,933.00.

“Gold prices are rallying as investors seek safety as recession and default risks won’t be going away anytime soon,” OANDA senior analyst Ed Moya said.

Currencies and bonds

The Canadian dollar was steady while its U.S. counterpart edged higher but still traded near its lowest level in seven months against a basket of world currencies.

The day range on the loonie was 74.20 US cents to 74.39 US cents in the early permarket period.

On world markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, rose 0.2 per cent to 102.17, holding narrowly above Wednesday’s seven-month lows, according to figures from Reuters. The index is down more than 1 per cent so far this year.

The euro was flat at US$1.0834, while Britain’s pound fell 0.4 per cent to US$1.2342, after U.K. data showed a surprise drop in retail sales in December, as British shoppers bought less, but spent more, Reuters reported.

In bonds, the yield on the U.S. 10-year note was up slightly at 3.433 per cent early Friday morning.

More company news

Google-parent Alphabet Inc is eliminating 12,000 jobs, its chief executive said in a staff memo shared with Reuters. The cuts mark the latest to shake the technology sector and come days after rival Microsoft Corp said it would lay off 10,000 workers. The job cuts affect teams across the company including recruiting and some corporate functions, as well as some engineering and products teams. -Reuters

Hexo Corp. says the Nasdaq Stock Market LLC has informed the cannabis company that it has regained compliance with minimum bid price requirements. Gatineau, Que.-based Hexo became non-compliant with the requirement when its closing bid price for common shares listed on the Nasdaq dropped below US$1 for 30 consecutive trading days. The company says it received a notice from Nasdaq on Jan. 19 that it has regained compliance after its shares closed at or greater than the US$1 per share minimum requirement for the last 10 consecutive business days. -The Canadian Press

Economic news

(8:30 a.m. ET) Canadian retail sales for November.

(10 a.m. ET) U.S. existing home sales for December.

With Reuters and The Canadian Press

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2023-01-20 12:11:16Z
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