MARKETS

Before the Bell: What every Canadian investor needs to know today

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Wall Street futures rose modestly early on Wednesday, but risk sentiment remained fragile as interest rate concerns remained heavy. Major European markets showed modest gains early on. TSX futures turned positive.

In the early premarket period, the Dow, S&P, and Nasdaq futures all posted modest gains. The previous day, all three stocks were down more than 1%. On Tuesday, the Dow Jones Industrial Average posted its worst single-day decline since March, and the S&P 500 index has fallen more than 5% so far this month, making it the worst month of the year so far. Canada’s S&P/TSX Composite Index ended down 1.23%.

“The strength of the US dollar and yields speaks to expectations that persistent inflation will persist and interest rates will remain high for an extended period of time, especially as oil and gasoline prices show little sign of recovering from their recent highs. ” Michael Hewson, chief market analyst at CMC Markets UK, said in a note.

“The very prospect of more robust U.S. inflation will mean the Fed will make more mistakes in raising U.S. rates over time,” he said.

Interest rate futures markets on Tuesday priced in a 20% chance that the Fed would raise rates in November and a 38% chance that it would raise rates in December, according to CME’s FedWatch.

In Canada, shareholders of Calgary-based Pipestone Energy Corp. will vote on a takeover offer from privately held Strathcona Resources Inc. in an all-stock deal that would create a company with an initial market capitalization of more than $8 billion. Pipestone’s board of directors supports the proposed deal, but opposing shareholders are urging shareholders to vote against the proposal, saying it undervalues ​​Pipestone.

On Wall Street, Costco Wholesale stock fell about 2% in premarket trading, even though the company’s quarterly sales and profits beat market expectations. Analysts cited overall market tension, concerns about the impact of high interest rates on spending as stock prices rebound, and weak comparable quarterly sales at its U.S. base.

Overseas, the pan-European STOXX 600 index rose 0.21% in morning trading. Britain’s FTSE 100 index was flat. Germany’s DAX rose 0.07% and France’s CAC40 rose 0.20%.

In Asia, Japan’s Nikkei Stock Average closed up 0.18%. Hong Kong’s Hang Seng rose 0.83%.

merchandise

Oil prices rose as supply concerns boosted sentiment, even though the outlook for demand remained uncertain amid a high interest rate environment.

Early pre-market, Brent’s daily range was between USD 94.10 and USD 94.99. West Texas Intermediate’s range was $90.40 to $91.63.

“There doesn’t seem to be anything stopping this oil price from rising,” said Ed Moya, senior analyst at OANDA.

“Energy traders know a bullish trend when they see one, but it takes more than a strong trend.” [U.S.] A weaker dollar, easing of Russia’s embargo and weak demand will thwart this rally. ”

Inventories rose by 1.6 million barrels last week, according to weekly U.S. inventory statistics released by the American Petroleum Institute late Tuesday. Analysts had expected a decline of about 300,000 barrels.

However, Reuters also notes that the market remains concerned that U.S. crude inventories at a key storage site in Cushing, Oklahoma, will fall below minimum operating levels.

Oil markets are on the decline, as further declines in Cushing, the delivery point for U.S. crude futures, would further exacerbate the supply squeeze caused by supply cuts by the Organization of the Petroleum Exporting Countries and its allies, the news agency collectively known as OPEC+. This could put new upward pressure on the market. report.

Further official U.S. government inventory figures are expected to be released later this morning.

Among other products, gold prices fell to a one-month low as the dollar continued to rise.

Spot gold fell 0.1% to US$1,897.91 an ounce by early Wednesday morning, after hitting its lowest since August 22 in early trade. US gold futures fell 0.2% to $1,915.90.

currency

The Canadian dollar fell, falling below US$74, while the US Canadian dollar remained near its highest level in 10 months against world currencies.

Intraday prices before dawn ranged from 73.91 US cents to 74.07 US cents. The Canadian dollar had fallen 0.50% against the greenback over the past five days as of early Wednesday morning.

In global markets, the U.S. dollar index, which measures the dollar against a basket of global currencies, rose 0.04% to 106.28 on Wednesday morning. The index had previously hit a 10-month high of 106.32.

Meanwhile, the euro fell 0.1% to $1.0567, after hitting a six-month low of $1.0555 in early trading, Reuters data showed.

The British pound fell 0.1% to US$1.2149, after hitting a six-month low of US$1.2135 earlier on Wednesday.

In the bond market, the yield on the US 10-year note fell to 4.501% ahead of the North American trading bell. On Tuesday, yields hit their highest level since 2007.

Other company news

e-commerce giant Shopify The companies announced Wednesday that they have invested in wholesale platform Faire and have entered into a global agreement for the company to adopt Shopify technology for its customers. Founded in 2017 and valued at $12.59 billion, Faire will be the preferred wholesale marketplace for Shopify merchants. The companies did not disclose the purchase price or how much of an investment Shopify was taking. –Reuters

the goal announced it would close nine stores in four U.S. states, including California, because theft and organized retail crime threaten the safety of the retailer’s employees and customers. The move will result in the closure of one store in New York City, two in Seattle, three in the San Francisco and Oakland markets, and three in Portland starting October 21. –Reuters

economic news

(8:30 a.m. ET) U.S. durable goods orders for August.

Partnership with Reuters and Canadian Press

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