Equities
Canada’s main stock index advanced at Thursday’s opening bell, recouping some of the previous session’s losses, with improved metal prices helping buoy sentiment. On Wall Street, the S&P 500 and Nasdaq both saw early gains with traders still trying to gauge the timing of rate cuts by the Federal Reserve.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 41.4 points, or 0.2 per cent, at 20,736.42.
In the U.S., the S&P 500 opened higher by 20.89 points, or 0.44 per cent, at 4,760.10, while the Nasdaq Composite gained 138.90 points, or 0.93 per cent, to 14,994.52 at the opening bell.
The Dow Jones Industrial Average fell 109.14 points, or 0.29%, at the open to 37,157.81.
“Robust [U.S.] economic data added to the thinking that, yes, maybe March is too early for the Fed to announce the first rate cut; there is no apparent reason for the Fed to rush to the rate cuts as early as in March,” Swissquote senior analyst Ipek Ozkardeskaya said in a note. “The Fed will likely start cutting in the first half but March seems overly optimistic given the ongoing strength of the economic data.”
According to the CME FedWatch tool, the probability of a March cut was just above 60 per cent, down from roughly 80 per cent early this year.
This morning, U.S. investors new figures showed the number of Americans applying for initial unemployment claims fell to the lowest level in more than a year. The U.S. Labor Department said jobless claims fell to 187,000 for the week ending Jan. 13, down 16,000 from the previous week.
In Canada, the Bank of Canada makes its next rate decision on Jan. 24 and is widely expected to hold rates unchanged, given this week’s hotter-than-forecast reading on inflationary pressures in the Canadian economy.
“While the higher headline was little surprise, and precisely mimicked the U.S. inflation experience in December, the slightly more unsettling news is the persistence of core in the mid-3s.,” BMO chief economist Doug Porter said.
“Given that wage trends are also stuck in the 4-per-cent-to-5-per-cent range, and now even housing may be showing a pulse, suggests that the Bank of Canada will doggedly maintain a cautious stance at next week’s rate decision and Monetary Policy Report,” he said in a report this week.
Overseas, the pan-European STOXX 600 was up 0.56 per cent by afternoon. Britain’s FTSE 100 edged up 0.12 per cent. Germany’s DAX and France’s CAC 40 added 0.71 per cent and 0.99 per cent.
In Asia, Japan’s Nikkei dipped 0.03 per cent. Hong Kong’s Hang Seng rose 0.75 per cent.
Commodities
Crude prices were firmer after the International Energy Agency again raised its demand forecast for this year and OPEC’s latest outlook also suggested solid global appetite.
The day range on Brent was US$77.77 to US$78.46 in the early premarket period. The range on West Texas Intermediate was US$72.65 to US$73.35.
Early Thursday, the IEA said global oil consumption is set to rise by 1.24 million barrels per day in 2024, up 180,000 barrels per day from its previous projection. The increase is largely driven by China’s expanding petrochemicals sector, Reuters reported.
Meanwhile, OPEC’s monthly report said world oil demand is expected to rise by 1.85 million barrels per day in 2025 to 106.21 million bpd. For 2024, OPEC saw demand growth of 2.25 million bpd, unchanged from its forecast in December.
“The OPEC forecasts should be taken with a pinch of salt as they have an interest in making the numbers look in favour of them,” Swissquote’s Ipek Ozkardeskaya said.
“But what’s real is the sharp decline in shipping transits through the Red Sea region, which will continue to push the shipping costs higher, could squeeze the energy markets and throw a floor under the oil selloff near the US$70-per-barrel level.”
Later Thursday morning, markets will get weekly U.S. inventory figures from the U.S. Energy Information Administration. On Wednesday, industry figures suggested that crude stocks rose by 480,000 barrels last week.
In other commodities, spot gold rose 0.1 per cent to US$2,008.17 per ounce by early Thursday morning, a day after it fell to US$2,001.72 - its lowest since Dec. 13. U.S. gold futures rose 0.2 per cent to US$2,010.10.
Currencies
The Canadian dollar edged higher while its U.S. counterpart pulled back somewhat but continued to remain near five-week highs as markets reevaluate earlier expectations for the timing of interest rate cuts this year.
The day range on the loonie was 73.89 US cents to 74.20 US cents in the early premarket period. The Canadian dollar was down about 1.5 per cent against the greenback over the past month as of early Thursday morning.
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, was down 0.17 per cent at 103.27. Earlier on Thursday, the index touched 103.69, its highest since Dec. 13.
The euro rose 0.06 per cent to US$1.0890. Britain’s pound was up modestly at US$1.2684.
In bonds, the yield on the U.S. 10-year note was lower at 4.077 per cent ahead of the North American opening bell.
More company news
Meta Platforms’ former chief operating officer Sheryl Sandberg plans to step down from her position on the company’s board of directors after her term ends in May, she said in a Facebook post on Wednesday. “Meta business is strong and well-positioned for the future, so this feels like the right time to step away,” Sandberg said in the post, adding that she will serve as an adviser to the company. Responding to Sandberg, Meta CEO Mark Zuckerberg said he looks forward to “a new chapter together”. -Reuters
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week of Jan. 13.
(8:30 a.m. ET) U.S. housing starts for December.
(8:30 a.m. ET) U.S. building permits for December.
(8:30 a.m. ET) U.S. Philadelphia Fed Index for January.
With Reuters and The Canadian Press
Terry Weber