Equities
Wall Street futures extended early gains Tuesday as traders weigh the implications of a tamer-than-expected reading on U.S. inflation. Major European markets were mostly positive. TSX futures were muted.
Dow, S&P and Nasdaq futures early gains accelerate after the release of the latest U.S. inflation data, with S&P and Nasdaq futures jumping more than 1 per cent. On Monday, the Dow ended up 0.16 per cent while the S&P 500 slid 0.08 per cent and the Nasdaq lost 0.22 per cent. Canada’s S&P/TSX Composite Index closed the session 0.28-per-cent higher.
Markets got the October U.S. consumer price index ahead of the start of trading, offering the latest glimpse into inflationary pressures in the U.S. economy. Headline inflation in October eased to 3.2 per cent, from 3.7 per cent in September. Economists had been forecasting an October number closer to 3.3 per cent. Core inflation to 4 per cent from 4.1 per cent.
Traders had been awaiting the figures looking for a clearer indication of where the Federal Reserve will go on borrowing costs. The Fed held rates steady at its most recent meeting, but Fed chair Jerome Powell also suggested the central bank could move again if needed to contain inflationary pressures.
In Canada, The Globe’s Niall McGee reports this morning that Vancouver-based Teck Resources Ltd. has agreed to sell its coal business to Swiss commodities trading giant Glencore PLC and two Asian steelmakers, in a US$8.9-billion transaction that requires federal approval. Teck has been fielding offers for its core metallurgical coal business since the spring, when an earlier plan to spin it off was cancelled at the eleventh hour because of insufficient shareholder support.
In earnings, Canadian investors will get results from CAE Inc. on Tuesday.
Insurer Sun Life said net income for the third quarter was $871-million or $1.48 a share, up from $111-million or 19 cents in the same period a year ago. Sun Life said the gain came, in part, as a result of higher interest rates. The results were released after Monday’s close of trading.
On Wall Street, retailer Home Depot reported a smaller-than-forecast decline in quarterly same-store sales. Comparable sales at the largest U.S. home improvement retailer fell 3.1 per cent in the third quarter, while analysts on average expected a 3.31-per-cent drop, according to LSEG IBES data. Shares were up more than 1 per cent in premarket.
Overseas, the pan-European STOXX 600 was up 0.23 per cent in morning trading. Britain’s FTSE 100 slid 0.19 per cent. Germany’s DAX and France’s CAC 40 gained 0.39 per cent and 0.16 per cent, respectively.
In Asia, Japan’s Nikkei finished up 0.34 per cent. Hong Kong’s Hang Seng slid 0.17 per cent.
Commodities
Crude prices were steady, drawing some support from an International Energy Agency forecast predicting improved demand this year and next.
The day range on Brent was US$82.27 to US$82.96 in the early premarket period. The range on West Texas Intermediate was US$78.07 to US$78.71.
“Crude oil prices are consolidating after yesterday’s boost in the wake of the OPEC report which raised their oil demand outlook, noting that Chinese and U.S. demand was not falling to a concerning extent,” Joshua Mahony, chief market analyst with Scope Markets, said.
“Today’s IEA upgrade to their demand forecast for 2024 brings additional fuel to the bullish crude story, although the price of crude has remained stable as the demand upgrade is balanced against the expectation of record supply in 2023 and 2024,” he said in an early note.
Early Tuesday, the IEA, the IEA raised its growth forecast for 2023 to 2.4 million barrels per day from 2.3 million bpd and moving closer to OPEC’s forecast of 2.46 million bpd.
For 2024, the IEA raised its growth forecast to 930,000 bpd from 880,000 bpd, still well below OPEC’s forecast of 2.25 million bpd.
“For now, with demand still exceeding available supplies heading into the Northern Hemisphere winter, market balances will remain vulnerable to heightened economic and geopolitical risks – and further volatility ahead,” the agency said in its monthly forecast.
The forecast comes a day after members of the OPEC+ group upgraded its forecast for this year and held to its previous projections for 2024. The group also blamed speculators for recent volatility in crude prices.
In other commodities, gold prices traded in a narrow range.
Spot gold was flat at US$1,945.40 per ounce by early Tuesday morning, after hitting its lowest in more than three weeks on Monday. U.S. gold futures were also steady at US$1,949.50.
Currencies
The Canadian dollar was slightly lower while its U.S. counterpart was down marginally against a group of currencies ahead of this morning’s U.S. inflation report.
The day range on the loonie was 72.31 US cents to 72.49 US cents in the early premarket period. The loonie has fallen more than 1 per cent against the greenback over the last month and is down nearly 2 per cent for the year to date.
“Crude oil is trading a little higher on the session and broader risk appetite is constructive but the CAD really can’t attract much support at the moment,” Shaun Osborne, chief FX strategist with Scotiabank, said.
“CAD sentiment is poor, weighed by concerns over slowing growth and soft commodity prices which are weighing on Canada’s terms of trade. Market positioning suggests investors are already aggressively short the CAD, however, which may limit the USD’s ability to advance significantly and might also leave markets vulnerable to CAD-positive surprises.”
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, was down 0.11 per cent at 105.52 early Tuesday morning. The index is little changed over the past five days.
Elsewhere, Britain’s pound was at US$1.2296 up 0.15 per cent and the euro was at US$1.0711, up 0.1 per cent, according to figures from Reuters.
In bonds, the yield on the U.S. 10-year note was lower at 4.618 per cent in the predawn period.
More company news
Aimia Inc. reported a loss in its latest quarter compared with a profit a year ago when its results were boosted by the sale of its stake in the PLM loyalty program. The investment holding company says its net loss attributable to equity holders amounted to $27.8-million or 37 cents per diluted share for the quarter ended Sept. 30. The result compared with a profit of $517.5-million or $5.89 per diluted share a year ago, when the company recorded a one-time gain of $530.6-million. Revenue totalled $114.3-million, up from $300,000 in the same quarter last year. -The Canadian Press
Chrysler-parent Stellantis said it is offering 6,400 U.S. salaried employees voluntary buyouts as it works to cut costs amid the transition to electric vehicles and agreeing to a new United Auto Workers contract. The buyouts would be about half the company’s salaried U.S. employees not represented by a union, which is currently 12,700. Another 2,500 Stellantis U.S. salaried workers are unionized and are not being offered the current buyout. -Reuters
Economic news
U.S. consumer price index for October (8:30 a.m. ET)
Fed Vice Chair for Supervision Michael Barr testifies to Senate panel (10 a.m. ET)
With Reuters and The Canadian Press
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2023-11-14 10:33:04Z
CBMihQFodHRwczovL3d3dy50aGVnbG9iZWFuZG1haWwuY29tL2ludmVzdGluZy9tYXJrZXRzL2luc2lkZS10aGUtbWFya2V0L2FydGljbGUtbm92ZW1iZXItMTQtYmVmb3JlLXRoZS1iZWxsLWNhbmFkaWFuLWludmVzdG9ycy1pbmZsYXRpb24v0gEA
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