Equities
Canada’s main stock index gained at Thursday’s opening bell with energy shares benefitting from higher crude prices while investors sift through results from some of the country’s biggest lenders. Key U.S. indexes were also positive in early trading after the latest reading on U.S. inflation underpinned expectations that the Federal Reserve won’t have to raise rates further.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 91.98 points, or 0.46 per cent, at 20,208.18. The index was up more than 6 per cent for November heading into Thursday’s session.
In the U.S., the Dow Jones Industrial Average rose 166.15 points, or 0.47 per cent, at the open to 35,596.57.
The S&P 500 opened higher by 4.29 points, or 0.09 per cent, at 4,554.87, while the Nasdaq Composite gained 6.56 points, or 0.05 per cent, to 14,265.05 at the opening bell.
In Canada, investors got results from Toronto-Dominion Bank, Royal Bank and CIBC this morning. On Tuesday, Scotiabank kicked off bank earnings with a lower profit than analysts had been forecasting amid higher loan-loss provisions and rising expenses.
This morning, The Globe’s Stefanie Marotta reports RBC said, adjusted to exclude certain items, it earned $2.78 per share. That edged out the $2.65 per share analysts expected, according to Refinitiv. The Globe’s James Bradshaw, meanwhile, reported that CIBC said it earned $1.52-billion or $1.57 per share after adjusting for certain items, ahead of analysts’ consensus estimate of $1.55 per share, according to data from the London Stock Exchange Group.
TD said, adjusted to exclude certain items, it earned $1.83 per share. That fell below the $1.91 per share analysts expected, according to Refinitiv.
Investors also got a reading from Statistics Canada on September and third-quarter GDP growth. The government agency said growth contracted at an annual rate of 1.1 per cent during the third quarter. However, the economy avoided slipping into a technical recession because second-quarter growth was revised up to 1.4 per cent annualized from an earlier estimate of a contraction of 0.2 per cent. (A technical recession is defined as two consecutive quarters of negative growth)
Statscan also said early estimates now suggest growth of 0.2 per cent in October from September’s gain of 0.1 per cent.
“Overall, there were a lot of moving parts in today’s releases given the historic revisions alongside the downside surprise to Q3′s headline number,” CIBC senior economist Andrew Grantham said.
“However, the underlying trend still appears to one of muted growth, and a decline in economic activity in per capita terms.”
In the U.S., markets got a reading on the Federal Reserve’s preferred measure of inflation before the North American opening bell. The PCE Index, excluding food and energy prices, rose 0.2 per cent on a monthly basis while year-over-year the index rose 3.5 per cent. Both numbers were close to market forecasts.
“Undoubtedly, the Fed will view today’s report as further a sign of progress being achieved and that the current level of monetary restraint continues to be appropriate,” CIBC economist Ali Jaffery said in a morning note.
Overseas, the pan-European STOXX 600 was up 0.18 per cent in morning trading. New figures released early Thursday showed inflation in the euro zone cooled to 2.4 per cent in November, from 2.9 per cent a month earlier. Economists had been expecting a reading closer to 2.7 per cent in the latest report. Britain’s FTSE 100 rose 0.30 per cent. Germany’s DAX and France’s CAC 40 gained 0.15 per cent and 0.12 per cent, respectively.
In Asia, Japan’s Nikkei rose 0.50 per cent. Hong Kong’s Hang Seng added 0.29 per cent.
Commodities
Crude prices were higher as investors await the outcome of today’s OPEC+ meeting amid reports the group has reached a preliminary agreement for production curbs.
The day range on Brent was US$82.77 to US$84.05 in the early premarket period. The range on West Texas Intermediate was US$77.46 to US$78.79.
OPEC+ members are scheduled to hold a virtual meeting Thursday to discuss production targets. The meeting had been postponed from last weekend while differences with African members were addressed. Reuters, citing an unnamed source, reported early Thursday morning that OPEC+ reached a preliminary agreement for an additional oil output cut of more than 1 million barrels per day.
“Oil prices have risen in response to a Wall Street Journal report indicating that Saudi Arabia is advocating an additional 1 million barrels per day insurance production cut evenly distributed among OPEC+ producers,” Stephen Innes, managing partner with SPI Asset Management, said.
“This move is a measure to limit a projected supply overhang during the first quarter of 2024. The OPEC+ alliance, comprising 23 nations, has been engaged in negotiations for deeper production cuts, and the proposed additional cut could be as significant as 1 million bpd, effective for the first three months of 2024.”
In other commodities, spot gold slid 0.2 per cent to US$2,041.19 per ounce by early Thursday morning. Bullion is up 2.8 per cent so far this month after rising 7.3 per cent in October, Reuters reported.
U.S. gold futures for December delivery fell 0.3 per cent to US$2,041.70.
Currencies
The Canadian dollar was weaker while its U.S. counterpart edged up from three-month lows but still looked set for its worst monthly performance in a year.
The day range on the loonie was 73.44 US cents to 73.71 US cents in the early premarket period. The Canadian dollar has gained nearly 1 per cent against the U.S. dollar over the past month.
Ahead of the North American opening bell, the U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.47 per cent to 103.25. The index has lost more than 3 per cent over the past month as markets begin speculating on the timing of potential interest rate cuts by the Federal Reserve.
The euro, meanwhile, was down 0.43 per cent against the U.S. dollar to US$1.0921. On Wednesday it hit its highest level since August at US$1.1017, according to figures from Reuters.
In bonds, the yield on the U.S. 10-year note was up slightly at 4.292 per cent early Thursday morning.
More company news
A six-week United Auto Workers strike at Ford cut sales by about 100,000 vehicles and cost the company US$1.7-billion in lost profits this year, the automaker said Thursday. Additional labor costs from the four-year and eight-month agreement will total US$8.8-billion by the end of the contract, translating to about $900 per vehicle by 2028, Chief Financial Officer John Lawler said in a company release. Ford will work to offset that cost through higher productivity and reducing expenses, Lawler said. -The Associated Press
BRP Inc. reported its third-quarter profit and revenue fell compared with a year ago and lowered its financial guidance for its full year. The manufacturer of Sea-Doos and Ski-Doos reported a profit of $63.1-million or 81 cents per diluted share for the quarter ended Oct. 31, down from $141.6-million or $1.76 per diluted share a year earlier. Revenue for the quarter totalled $2.47-billion, down from $2.71-billion in the same quarter last year. -The Canadian Press
Economic news
(8:30 a.m. ET) Canada’s real GDP and chain prices for Q3.
(8:30 a.m. ET) Canada’s monthly real GDP for September.
(8:30 a.m. ET) Canada’s job vacancy rate for September
(8:30 a.m. ET) U.S. initial jobless claims for week of Nov. 25.
(8:30 a.m. ET) U.S. personal spending and income for October.
(8:30 a.m. ET) U.S. core PCE price index for October.
(9:45 a.m. ET) U.S. Chicago PMI for November
(10 a.m. ET) U.S. pending home sales for October.
Also: OPEC+ meeting
With Reuters and The Canadian Press
Terry Weber