Equities
Canada’s main stock index opened down Friday with traders sifting through the latest results from the country’s biggest lenders. On Wall Street, key indexes were also modestly lower in early trading ahead of comments from Federal Reserve chair Jerome Powell later in the day.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 76.85 points, or 0.38%, at 20,159.44. The index was up 0.67 per cent for the week heading into Friday’s session.
In the U.S., the Dow Jones Industrial Average fell 36.44 points, or 0.10 per cent, at the open to 35,914.45.
The S&P 500 opened lower by 8.37 points, or 0.18 per cent, at 4,559.43, while the Nasdaq Composite dropped 44.86 points, or 0.32 per cent, to 14,181.35 at the opening bell.
On Friday, Canadian investors got results from Bank of Montreal and National Bank, capping a week of results from the country’s biggest lenders.
The Globe’s Stefanie Marotta reports this morning that BMO earned $1.6-billion, or $2.06 per share, in the three months that ended Oct. 31. That compared with $4.5-billion, or $6.51 per share, in the same quarter last year. Adjusted to exclude certain items, including costs related to BMO’s acquisition of Bank of the West and legal expenses, the bank reported profit of $2.81 per share. That fell below the $2.86 per share analysts expected, according to Refinitiv.
National Bank, meanwhile, earned $768-million, or $2.14 per share, in the three months that ended Oct. 31. That compared with $738-billion, or $2.08 per share, in the same quarter last year. Adjusted to exclude certain items, the bank said it earned $2.44 per share. That edged out the $2.25 per share analysts expected, according to Refinitiv.
Royal Bank and CIBC reported higher profit on Thursday, topping analyst forecasts while TD Bank saw profit slip, falling short of expectations.
On the economic side, Statistics Canada reported that the Canadian economy generated nearly 25,000 new jobs in November, more than most economists had been expecting. The unemployment rate rose 0.1 percentage points to 5.8 per cent, continuing an upward trend observed since April, the government agency said.
“November’s employment data pointed to a continuation of the recent trend - better than expected headline job growth which wasn’t strong enough to keep up with the rapid rise in the size of the labour force,” CIBC senior economist Andrew Grantham said.
“Overall, there is further evidence here to suggest that labour market conditions have loosened relative to what prevailed earlier in the year, albeit not by enough to bring forward the timeline for potential interest rate cuts,” he said.
The report follows the latest GDP data, released on Thursday, which showed the Canadian economy contracted at an annual rate of 1.1 per cent in the third quarter. Economists had been forecasting flat to modestly positive growth. However, the economy avoided meeting the definition of a technical recession because growth in the second quarter, originally reported as negative, was revised higher.
The Bank of Canada makes its next interest rate decision on Dec. 6 and is expected to hold rates steady.
In the U.S., Federal Reserve chair Jerome Powell is scheduled to speak later this morning and again this afternoon.
“Powell’s speech will likely be dotted with the pretense of two-way policy risk,” Stephen Innes, managing partner with SPI Asset Management, said. “I would seriously doubt the market is going to bite on that, however.”
Overseas, the pan-European STOXX 600 was up 0.65 per cent. Britain’s FTSE 100 gained 0.77 per cent. Germany’s DAX and France’s CAC 40 added 0.83 per cent and 0.59 per cent, respectively.
In Asia, Japan’s Nikkei slid 0.17 per cent. Hong Kong’s Hang Seng lost 1.25 per cent.
Commodities
Crude prices steadied as markets continue to weigh a decision by OPEC+ members to extend production curbs.
The day range on Brent was US$80.13 to US$81.15 in the early premarket period. The range on West Texas Intermediate was US$75.36 to US$76.34.
On Thursday, Saudi Arabia, Russia and other members of OPEC+ agreed to voluntary output reduction of 900,000 barrels per day in addition to extending 1.3 million barrels per day in production cuts already in place, Reuters reported. Delegates had earlier discussed as much as 2 million bpd in new output curbs, the news agency said.
“The announcement of the new agreement was immediately overshadowed by Angola breaking ranks and saying it would continue to pump as before, and seeding doubt as to whether other OPEC members would do the same,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
He said positive sentiment from the OPEC+ deal was also tempered by word that the U.S. reported record output of its own of 13.2 million barrels a day and the [International Energy Agency] saying it expected to see the oil market return to surplus next year.
In other commodities, spot gold rose 0.2 per cent to US$2,039.00 per ounce by early Friday morning, up about 2 per cent for the week so far. Gold rose US$60 in November in its second straight monthly gain, according to figures from Reuters.
U.S. gold futures for February delivery rose 0.1 per cent to $2,059.00.
Currencies
The Canadian dollar was higher, trading just below 74 US cents in the early premarket period, while its U.S. counterpart slid against a group of currencies after seeing its weakest month in a year in November.
The day range on the loonie was 73.65 US cents to 73.98 US cents in the early premarket period. The Canadian dollar was up 0.83 per cent against the greenback over the last five days.
On world markets, the U.S. dollar index, which weighs that currency against a basket of world counterparts, was down 0.18 per cent at 103.31 by early Friday morning. The index put in its weakest monthly performance in a year in November as markets start to weigh the prospect of interest rate cuts in the new year.
The euro was up 0.1 per cent at US$1.08990 in early trading, while Britain’s pound advanced 0.3 per cent at US$1.26665.
In bonds, the yield on the U.S. 10-year note was lower at 4.315 per cent ahead of the North American opening bell.
More company news
First Quantum Minerals will suspend its current-year production outlook for the Cobre mine in Panama and has initiated international arbitration over a contested contract with the country’s government, the miner said on Friday. The lucrative Cobre Panama copper mine has sparked public anger in the country, starting as small, environmental protests that have morphed into bigger demonstrations against the government on charges that the contract was too generous. The contract, agreed between the company and the Panama government in October, provided First Quantum a 20-year mining right with an option to extend for another 20 years, in return for US$375-million in annual revenue to Panama. -Reuters
Canada’s Brookfield Asset Management said on Friday it had raised US$28-billion towards its largest ever fund for investments in infrastructure assets globally. The asset manager said it had also raised US$2-billion for related co-investment vehicles. The fund has already deployed 40% of its capital in six investments, the company said. -Reuters
Pfizer said on Friday it would not advance a twice-daily version of oral weight-loss drug danuglipron into late-stage studies after most patients dropped out of a mid-stage trial with high rates of side effects such as nausea and vomiting. While Pfizer will now focus on a once-daily version, the decision still marks a blow to its ambitions to become an early contender in a booming market for weight-loss drugs that analysts have forecast could be worth US$100-billion by the end of the decade. -Reuters
Economic news
(8:30 a.m. ET) Canadian employment for November.
(9:30 a.m. ET) Canada’s S&P Global Manufacturing PMI for November
(10 a.m. ET) U.S. ISM Manufacturing PMI for November
(10 a.m. ET) U.S. construction spending for October
(11 a.m. ET) U.S. Fed chair Jerome Powell joins a fireside chat at Spelman College.
(2 p.m. ET) Mr. Powell and Fed governor Lisa Cook participate in a roundtable discussion on tech innovation and entrepreneurship.
With Reuters and The Canadian Press
Terry Weber