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

Equities

Canada’s main stock index opened higher Tuesday helped by gains in materials and tech shares. Key U.S. indexes were also positive at the start of trading with investors awaiting comments from Federal Reserve chair Jerome Powell later in the week.

At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 15.24 points, or 0.08 per cent, at 19,800.11.

The Dow Jones Industrial Average rose 30.48 points, or 0.09 per cent, at the open to 34,494.17.

The S&P 500 opened higher by 15.56 points, or 0.35 per cent, at 4,415.33, while the Nasdaq Composite gained 96.35 points, or 0.71 per cent, to 13,593.95 at the opening bell.

Markets are now looking ahead to comments from Federal Reserve chairman Jerome Powell at the Jackson Hole summit on Friday for signals about the path ahead for borrowing costs.

“Fed Chair Powell will be trying to avoid a policy mistake here,” OANDA senior analyst Ed Moya said.

“The annual Jackson Hole gathering will undoubtedly emphasize the need for policymakers to keep rates higher for longer. Powell might stick to his hopes of a soft landing, while hinting that eventually rates will be able to come down.”

He said Wall Street is expecting Mr. Powell to deliver a ‘hawkish hold’, “but any signs that the Fed is concerned about disorderly markets could end up supporting the case that the Fed will cut rates early next year.”

In corporate news, investors got results from U.S. retailer Lowe’s Companies Inc. before the start of trading. Macy’s Inc. also released earnings.

Lowe’s said early Thursday that same-store sales at the company fell 1.6 per cent in the second quarter, compared with analysts’ average estimate of a 2.36-per-cent decline, according to Refinitiv data. The company reported a profit of US$4.56 per share. Analysts on average had estimated earnings of US$4.49 per share. Shares were up nearly 3 per cent shortly after the opening bell.

In this country, bank earnings will be front and centre starting this week with Royal Bank and Toronto-Dominion Bank posting quarterly results on Thursday morning. Canada’s other major lenders follow with earnings reports next week.

Elsewhere, The Globe’s Alexandra Posadzki reports Quebecor Inc. is urging the federal Industry Minister to intervene in its dispute with Rogers Communications Inc., after learning that Rogers intends to appeal a recent wireless rate-setting decision by Canada’s telecom regulator. Rogers and Quebecor entered into final-offer arbitration earlier this year after failing to reach an agreement regarding the rates for Quebecor’s Videotron Ltd. subsidiary to access Rogers’s wireless network under the Canadian Radio-television and Telecommunications Commission’s new mobile virtual network operator, or MVNO, regime.

Overseas, the pan-European STOXX 600 was up 0.93 per cent by midday.

Britain’s FTSE 100 added 0.67 per cent. Germany’s DAX rose 1.17 per cent. France’s CAC 40 was up 1.18 per cent.

In Asia, Japan’s Nikkei finished up 0.92 per cent. Hong Kong’s Hang Seng gained 0.95 per cent.

Commodities

Crude prices were choppy in early trading as investors await the first of two weekly U.S. inventory reports later in the day and weigh continuing concerns about the health of China’s economy.

The day range on Brent was US$83.94 to US$84.64 in the early premarket period. The range on West Texas Intermediate was US$80.48 to US$80.93.

“The market is driven by two major forces: the supply tightness and the Chinese demand expectations,” Swissquote senior analyst Ipek Ozkardeskaya said.

“These days, the Chinese demand expectations are very much in focus, which could help the oil bears take advantage for selling the recent rally in oil prices. But tighter OPEC rhetoric will remain a major support into the 200-day-moving-average, near US$76 per barrel.

Later Tuesday, markets will weekly U.S. inventory figures from the American Petroleum Institute. Those will be followed Wednesday morning by more official U.S. government figures.

A preliminary Reuters poll showed crude oil and gasoline inventories were expected to have fallen last week.

In other commodities, gold prices were trading above the key US$1,900-an-ounce level as the U.S. dollar pulled back somewhat ahead of the Jackson Hole meeting later in the week.

Spot gold rose 0.3 per cent to US$1,898.79 per ounce by early Tuesday morning, having risen to as high as US$1,902.09 earlier. U.S. gold futures gained 0.3 per cent to US$1,927.70.

Currencies

The Canadian dollar was higher, helped by improved risk sentiment, while its U.S. counterpart pulled back from recent 10-week highs.

The day range on the loonie was 73.75 US cents to 73.94 US cents in the early premarket period. The Canadian dollar has lost about 2.65 per cent against the U.S. dollar over the past month as of early Tuesday morning.

“The price action reflects the unsettled tone for the CAD here — the currency is struggling to make headway under its own power, with external factors still a major influence on trading, while sentiment-driven losses leave it looking quite cheap relative to fair value,” Shaun Osborne, chief FX strategist with Scotiabank, said.

There were no major Canadian economic releases on Tuesday’s calendar.

On world markets, the U.S. dollar index, which weighs the greenback against a group of world currencies, was down 0.25 per cent at 103.06, down from Friday’s 10-week high of 103.68. The index is up about 1 per cent so far this month, according to figures from Reuters.

The euro, meanwhile, edged up to US$1.0928. Britain’s pound added about 0.3 per cent to US$1.2798.

In bonds, the yield on the U.S. 10-year note was lower at 4.316 per cent in the predawn period. The yield rose to 4.35 per cent on Monday, not far from levels last seen in 2007.

More company news

Westport Fuel Systems Inc. says chief executive David Johnson is stepping down from the top job and resigning from the board, effective immediately. The company says Tony Guglielmin, who serves on the Westport board and as chair of the audit committee, will act as interim CEO. Chief financial officer Bill Larkin and chief legal officer Lance Follett will also take on expanded roles during the transition. Westport says the board has formed a search committee to conduct and oversee a search for the company’s next CEO. -The Canadian Press

Macy’s posted a drop in quarterly profit on Tuesday, dragged down by heavy discounting and higher promotions to clear spring and early summer merchandise. The department store chain logged net sales of US$5.13-billion, beating analysts’ average estimate of US$5.09-billion, according to Refinitiv data. -Reuters

“Call of Duty” maker Activision will sell its non-European streaming rights to Ubisoft Entertainment to get the biggest deal yet in video-gaming past British regulators, potential owner Microsoft said on Tuesday. Microsoft said on Tuesday it believed its new proposal was a “substantially different transaction” and that it expected the CMA review process to be completed before Oct. 18. -Reuters

Nvidia shares rose on Tuesday before the bell in a buildup in expectations over the quarterly results of the chip designer that has been the biggest beneficiary of a boom in artificial intelligence. Rising hopes of Nvidia’s revenue target once again surpassing Wall Street estimates have fueled a 16.5-per-cent surge in shares over the past week. They rose 8 per cent to lift broader markets on Monday and closed just 2.1 per cent short of their all-time high of $480.88 on July 14. Wall Street expects Nvidia, which dominates the market for chips used to power generative AI like ChatGPT and many such services, to forecast 110-per-cent growth in third-quarter revenue to US$12.50-billion when it reports results on Wednesday. -Reuters

Economic news

(8:30 a.m. ET) Canada’s new housing price index for July.

With Reuters and The Canadian Press

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2023-08-22 09:24:24Z
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