Before the Bell: What every Canadian investor needs to know today
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Wall Street futures were mixed early Monday as investors await the start of earnings season, with some of the biggest banks in the U.S. set to report results in coming days. Major European markets were little changed. TSX futures modestly weaker with crude prices flagging.
Dow, S&P and Nasdaq futures were all hovering near the flat line in the predawn period. All three rebounded Friday after a sharp selloff earlier in the week. The three key indexes all managed gains for the week. The S&P/TSX Composite Index closed Friday’s session up more than 1 per cent.
Michael Hewson, chief market analyst with CMC Markets UK., said expectations around the second-quarter numbers from American banks have been tempered by recent warnings from JPMorgan CEO Jamie Dimon “that trading revenue could well be lower than the consensus estimates of $6.5-billion as lower yields and volatility impacted turnover.”
“Dimon also played down expectations over loan demand and income after a bumper Q1,” Mr. Hewson said.
“The trend over loan demand was also notable in its Q1 numbers which the bank said was likely to remain challenged.”
In this country, markets will get the latest policy decision from the Bank of Canada on Wednesday. The central bank is widely expected to continue tapering its bond-buying program with a strong rebound in Canadian hiring and an improved business outlook offsetting growing concerns about the spread of the Delta variant around the globe. The bank will also release its latest quarterly monetary policy report alongside the rate decision.
“The Bank of Canada will buck the trend by further tapering their bond-buying,” OANDA senior analyst Jeffrey Halley said.
“Along with firm commodity and oil prices, that should see the Canadian dollar outperform this week.”
Overseas, major European markets were wavering in early going. The pan-European STOXX 600 was little changed. Britain’s FTSE 100 fell 0.48 per cent. Germany’s DAX slid 0.05 per cent and France’s CAC 40 was off 0.32 per cent.
In Asia, Japan’s Nikkei closed up 2.25 per cent. Hong Kong’s Hang Seng gained 0.62 per cent.
Crude prices were down with concerns over the global economic rebound and uncertainty over OPEC’s next move after the failure of output talks weighing on sentiment.
The day range on Brent is US$74.82 to US$75.84. The range on West Texas Intermediate is US$73.86 to US$74.93.
Finance chiefs from the G20 nations met over the weekend and cautioned that the spread of variants and a disparity in access to vaccines threatens the global recovery.
A Reuters tally of new COVID-19 infections shows them rising in 69 countries, with the daily rate pointing upwards since late-June and now hitting 478,000.
Meanwhile, the collapse of production talks among OPEC members and their allies last week continues to add volatility into the markets.
“Prices are going to stay volatile for as long as the impasse remains,” said Howie Lee, an economist at Singapore’s OCBC bank.
“On the surface it looks like it should support prices, but the risk remains that a complete breakdown will result in a price war not dissimilar to last year,” he said.
In other commodities, gold prices fell, hit by a stronger U.S. dollar.
Spot gold fell 0.4 per cent to US$1,800.96 per ounce. U.S. gold futures dropped 0.6 per cent to US$1,799.30 per ounce.
The Canadian dollar was weaker as investors await the latest policy decision from the Bank of Canada later in the week and the U.S. dollar held steady against a group of world currencies.
The day range on the loonie is 80.06 US cents to 80.34 US cents.
The week’s key event for the loonie will be Wednesday’s policy decision and monetary policy report from Canada’s central bank. The bank is widely expected to continue to pare its bond-buying program.
“We expect no major forecast changes in next week’s Bank of Canada rate decision and monetary policy report,” RBC economists Nathan Janzen and Rannella Billy-Ochieng said in a note.
“Indeed, the Canadian economic recovery is progressing largely in line with the central bank’s expectations, suggesting April GDP growth forecasts should be left mostly intact.”
On world markets, the U.S. dollar index, which weighs the greenback against a group of currencies, was off about 0.01 per cent.
The euro was flat against the U.S. dollar.
Japan’s safe-haven yen stood at 110.07 yen per U.S. dollar, off Thursday’s one-month high of 109.535, according to figures from Reuters.
Cryptocurrencies were little moved, with bitcoin at US$34,431 and ether at US$2,154.
China releases trade surplus data
With Reuters and The Canadian Press