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Equities

Canada’s main stock index tracked crude prices lower at Thursday’s open. South of the border, Wall Street’s key indexes also started in the red with investors keeping Federal Reserve chair Jerome Powell’s second day of testimony in Washington.

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At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 5.27 points, or 0.03%, at 20,141.97.

The Dow Jones Industrial Average fell 8.4 points, or 0.02 per cent, at the open to 34924.81. The S&P 500 fell 5.3 points, or 0.12 per cent, at the open to 4369.02, while the Nasdaq Composite dropped 9.2 points, or 0.06 per cent, to 14635.781 at the opening bell

“A rotation out of cyclicals is in play with high-growth tech mopping up demand,” OANDA market analyst Sophie Griffiths said.

“Fed Chair Powell’s dovish comments last night have pulled interest rate hike expectations back, favourable for high-growth tech stocks, which are particularly sensitive to interest rate expectations.”

On Thursday, Mr. Powell continues a second day of testimony on Capitol Hill. On Wednesday, he helped ease concerns that the central bank would have to tighten policy to contend with rising inflation, suggesting again that price pressures remain transitory and goal posts for a shift in policy are still “a ways off.”

Ahead of Thursday’s open, investors got new figures on the U.S. jobs market. The U.S. Labor Department said initial claims for state unemployment benefits fell by 26,000 to 360,00, in line with forecasts.

In this country, markets got a snapshot of the country’s real estate market.

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The Canadian Real Estate Association says national btcc交易所官网home sales declined 8.4 per cent on a month-over-month basis in June. Actual activity was up 13.6 per cent year-over year. The national average selling price was $679,000 in June, down 2.4 per cent from May but up 25.9 per cent from a year earlier, CREA said.

On the corporate side, Brookfield Infrastructure Partners raised its offer for Inter Pipeline Ltd to for a second time as it looks to compete with a rival bid from Pembina Pipeline Corp. Pembina has made an all-stock bid of about $8.3-billion. Pembina shares edged higher in early trading in Toronto.

Overseas, European markets were mostly lower by afternoon with the pan-European STOXX 600 falling 0.68 per cent. Germany’s DAX was down 0.95 per cent, France’s CAC 40 slid 0.81 per cent. Britain’s FTSE 100 lost 0.72 per cent.

In Asia, Japan’s Nikkei finished down 1.15 per cent. Hong Kong’s Hang Seng rose 0.75 per cent. Early Thursday, new figures showed that China’s GDP rose 7.9 per cent year-over-year, short of the 8.1 per cent economists polled by Reuters had been expecting.

Commodities

Crude prices extended the previous session’s declines after reports that OPEC members had reached a compromise on output curbs.

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The day range on Brent is US$73.50 to US$74.59. The range on West Texas Intermediate is US$71.68 to US$72.96.

Both benchmarks fell more than 2 per cent on Wednesday after Reuters reported Saudi Arabia and the United Arab Emirates had resolved their differences, paving the way for a deal to supply more crude to a tight oil market.

“Any agreement between Saudi Arabia and the UAE must be signed off by the whole OPEC+ grouping, adding a layer of uncertainty to the proceedings,” OANDA senior analyst Jeffrey Halley said.

“Further muddying the waters, Iraq has also allegedly now asked for a higher production baseline. If this is the start of a flood of member requests, then oil prices are now vulnerable to a deeper correction lower.”

Meanwhile, fresh weekly inventory figures out of the U.S. did little to underpin sentiment. The U.S. Energy Information Administration reported that crude inventories fell for an eighth straight week, but gasoline and diesel inventories rose even as refinery utilization fell.

In other commodities, gold prices rose to their highest in a month after Mr. Powell’s comments boosted bullion’s appeal as an inflation hedge.

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Spot gold was up 0.3 per cent at US$1,832.23 per ounce. Earlier in the session, bullion hit a peak of US$1,833.65, its highest since June 16.

U.S. gold futures climbed 0.4 per cent to US$1,832.90.

Currencies

The Canadian dollar was down slightly amid faltering crude prices, while its U.S. counterpart steadied against world currencies in the wake of dovish comments from Fed chair Jerome Powell.

The day range on the loonie is 79.69 US cents to 79.99 US cents.

Canadian investors will get June existing btcc交易所官网home sales figures ahead of the start of trading, but no other major market-moving reports are on the calendar.

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“The U.S. dollar is generally a bit firmer overnight,” RBC chief currency strategist Adam Cole said.

“Powell’s answers in the Q&A session were generally dovish, but in line with previous comments and U.S. yields are around the bottom of the week’s range.”

Against a basket of currencies, the U.S. dollar held at 92.41.

Against the greenback, the euro steadied at US$1.1831, recovering from an early April low of US$1.1772 hit before the Powell testimony in the previous session, according to figures from Reuters.

The safe-haven yen was last up 0.1 per cent at 109.86 per U.S. dollar and close to testing multi-month peaks at 129.91 per euro. The Australian dollar fell to US$0.7453, while the New Zealand dollar dipped below 70 U.S. cents to US$0.6998.

More company news

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Barrick Gold Corp, said on Thursday its second-quarter production fell 5.4% from the previous quarter, dented by planned maintenance shutdowns at Nevada Gold Mine and Pueblo Viejo in the Dominican Republic. Total preliminary gold production fell to 1.04 million ounces in the three months ended June 30, from 1.10 million ounces in the previous quarter, the company said.

Morgan Stanley reported a more than 11% jump in quarterly profit on Thursday, as its investment banking business benefited from record levels of activity in deal making and capital markets. The Wall Street bank said its net income applicable to common shareholders rose to $3.4-billion, or $1.85 per share, in the second quarter ended June 30 from $3.05-billion, or $1.96 per share, a year earlier. Analysts on average were expecting the bank to report a profit of $1.65 per share, according to IBES data from Refinitiv.

Lyft Inc on Thursday said it will return the option for passengers to book shared rides in select U.S. markets for the first time since the pandemic, when shared trips were scrapped to halt the spread of the novel coronavirus. Lyft said shared rides, which allow multiple passengers to split a car traveling in the same direction, would become available in Chicago, Philadelphia and Denver as of Monday. The company, which prior to the pandemic operated shared rides in 18 markets, said it plans to return the option to all those cities in the next few months.

Economic news

9 a.m. (ET) Canada existing btcc交易所官网home sales for June.

830 a.m. (ET) U.S. initial jobless claims for previous week.

830 a.m. (ET) U.S. import prices for June.

830 a.m. (ET) U.S Philadelphia Fed Index and Empire State Manufacturing Survey.

915 a.m. (ET) U.S. industrial production for June.

930 a.m. (ET) Fed Chair Powell testifies to the Senate Banking Committee.

With Reuters and The Canadian Press

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