Equities
Canada’s main stock index opened higher Thursday, helped by gains in materials shares. On Wall Street, key indexes were positive following the previous session’s Fed-fuelled selloff as traders await key tech earnings after the close.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 94.23 points, or 0.45 per cent, at 21,116.11.
In the U.S., the S&P 500 opened higher by 15.46 points, or 0.32 per cent, at 4,861.11, while the Nasdaq Composite gained 90.01 points, or 0.59 per cent, to 15,254.02 at the opening bell.
The Dow Jones Industrial Average rose 25.04 points, or 0.07 per cent, at the open to 38,175.34.
“The Federal Reserve kept rates unchanged, but in the statement came out less dovish than had been expected, with Fed chair Jay Powell leaning against the idea of a March rate cut during the ensuing press conference,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“As far as the statement was concerned, the reference to possible additional rate hikes was removed, while in its guidance the central bank stated that it does not expect it will be appropriate to cut rates until there is greater confidence inflation is moving sustainably towards 2 per cent.”
Futures tied to the Fed’s key rate now suggest a roughly 36-per-cent chance of a March cut, although bets on a May cut increased following Mr. Powell’s news conference.
Later Thursday morning, the Bank of England said it would keep its key rate steady. Reuters reports six out of nine members of the Monetary Policy Committee voted to keep rates at a 15-year high of 5.25 per cent. Jonathan Haskel and Catherine Mann opted voted for a 0.25 percentage-point hike, while Swati Dhingra voted for a cut of the same size.
On the corporate side, earnings continue to dominate on both sides of the border.
In Canada, investors got results from telecom giant Rogers Communications and luxury coat company Canada Goose this morning.
The Globe’s Alexandra Posadzki reports this morning that Rogers saw its fourth-quarter profit decline by 35 per cent to $328-million, while its revenue rose 28 per cent to $5.34-billion. The profit for the three-month period ended Dec. 31 amounted to 62 cents per share, down from $1.00 a share during the same quarter last year. Adjusting for one-time items, profit amounted to $1.19 a share, surpassing analyst expectations of $1.12 per share for adjusted earnings.
Tech earnings remain in focus on Wall Street, with titans Amazon, Apple and Meta all scheduled to deliver quarterly results after the close of trading.
“They’d better blow investors’ minds,” Swissquote senior analyst Ipek Ozkardeskaya said in an early note. “Otherwise, the tech selloff is poised to gather momentum – despite the falling yields.”
Earlier this week, shares of Google-parent Alphabet took a hit despite beating analysts’ forecasts for revenue and profit in the latest quarter after holiday ad sales disappointed.
Overseas, the pan-European STOXX 600 was down 0.08 per cent by midday. Britain’s FTSE 100 added 0.19 per cent. Germany’s DAX slid 0.10 per cent and France’s CAC 40 fell 0.60 per cent. New figures released Thursday showed euro-zone inflation eased to euro to 2.8 per cent in January from 2.9 per cent in December, matching market forecasts.
In Asia, Japan’s Nikkei lost 0.76 per cent. Hong Kong’s Hang Seng added 0.52 per cent.
Commodities
Crude prices were up in early trading as markets digest the latest comments from the Fed and drew support from efforts in China to underpin the economy.
The day range on Brent was US$80.16 to US$1.29 in the early premarket period. The range on West Texas Intermediate was US$75.44 to US$76.61.
“Oil prices have pulled back over the last few sessions after surging higher since the start of the year,” OANDA senior analyst Craig Erlam said in a recent note. “Middle East tensions and disruptions in the Red Sea appear to be among the driving factors here but there is also the fact that countries continue to resiliently cope with high interest rates, which may soon fall.”
The U.S., he said, is at the forefront of that, potentially on course for the “fairytale outcome” of a strong and growing economy, low inflation and falling rates.
“This could boost demand for crude this year more than anticipated and by extension the price,” he said.
Prices also drew support from news this week that a state-backed property project in China has received the first development loan under new measures and two more major cities have eased home-buying curbs, according to Reuters, amid concerns about the court-ordered liquidation of property developer Evergrande.
Meanwhile, a committee of OPEC+ ministers proposed no changes to the group’s oil output plans at a meeting on Thursday. Leading ministers from the Organization of the Petroleum Exporting Countries (OPEC) and allies, led by Russia, known as OPEC+, met online to discuss market fundamentals.
In other commodities, spot gold rose 0.3 per cent to US$2,043.80 per ounce by early Thursday morning. On Wednesday, gold hit a more than two-week high of US$2,055.89 before paring gains to end the session 0.1-per-cent higher. U.S. gold futures fell 0.3 per cent to US$2,061.20.
Currencies
The Canadian dollar was lower while its U.S. counterpart rose against a group of world currencies and held near recent highs after the Fed signalled a March rate cut was unlikely.
The day range on the loonie was 74.26 US cents to 74.52 US cents in the early premarket period.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies was up 0.39 per cent at 103.67.
The euro fell 0.17 per cent to US$1.0802. Britain’s pound slid 0.28 per cent to US$1.2653 ahead of the Bank of England’s rate decision.
In bonds, the yield on the U.S. 10-year note was lower at 3.944 per cent.
More company news
Elon Musk wants Tesla investors to decide on moving the company’s corporate listing to Texas after a Delaware court decided he shouldn’t get a multibillion-dollar pay package. The electric car company’s CEO said early Thursday that Tesla would get shareholders to vote on whether to switch its corporate registration to Texas, where its physical headquarters is located. “Tesla will move immediately to hold a shareholder vote to transfer state of incorporation to Texas,” Musk wrote on his social media platform X, formerly known as Twitter. -The Associated Press
Canada Goose Holdings forecast fourth-quarter revenue above analysts’ estimates on Thursday, as the luxury goods maker bets on a sharp rebound in crucial market China to help ride out a slowdown in the U.S. Luxury brands such as LVMH and Cartier owner Richemont have signaled a bounce back in China even as the world’s second-largest economy faces a property crisis and high youth unemployment. Canada Goose’s revenue in Asia-Pacific jumped 62 per cent to $270.7-million in the third quarter, compared with a 13-per-cent rise in the prior quarter. -Reuters
Economic news
Bank of England monetary policy announcement
(8:30 a.m. ET) U.S. initial jobless claims for week of Jan. 27.
(8:30 a.m. ET) U.S. productivity and unit labor costs for Q4.
(9:30 a.m. ET) Canada’s S&P Global Manufacturing PMI for January.
(9:45 a.m. ET) U.S. S&P Global Manufacturing PMI for January.
(10 a.m. ET) U.S. ISM Manufacturing PMI for January.
(10 a.m. ET) U.S. construction spending for December.
With Reuters and The Canadian Press
Terry Weber