Equities
Global stocks drifted after softer-than-expected U.S. inflation numbers boosted hopes of a Federal Reserve interest rate cut, but also pointed to underlying weakness in one of the world’s biggest economies.
U.S. stock indexes opened little changed as investors booked profits in tech heavyweights and moved into laggards such as small-caps.
The Dow Jones Industrial Average rose 0.07 per cent at the bell to 39,783.28, the S&P 500 gained 0.11 per cent to 5,590.76, and the Nasdaq Composite advanced 0.11 per cent to 18,303.64.
The Toronto Stock Exchange’s S&P/TSX composite index hit a record high, led by energy shares. It opened up 0.43 per cent at 22,641.81.
On Wall Street, markets are watching results from Wells Fargo, JPMorgan Chase & Co. and Citigroup Inc. as earnings season begins.
JPMorgan Chase and Citigroup have reported increased profit in the second quarter, buoyed in part by rising investment banking fees. Wells Fargo’s second-quarter profit declined as it shelled out more to hold on to deposits amid intense competition for customers’ money.
“Cooling U.S. inflation numbers may support the case for the Fed to kick-start its policy easing process earlier rather than later, but it also adds to the series of downside surprises in U.S. economic data, which points to a clear weakening of the U.S. economy,” said Yeap Jun Rong, market strategist at IG.
Overseas, the pan-European STOXX 600 was 0.43 per cent higher in morning trading. Britain’s FTSE 100 rose 0.11 per cent, Germany’s DAX added 0.34 per cent and France’s CAC 40 rose 0.73 per cent.
In Asia, Japan’s Nikkei closed down 2.45 per cent, while Hong Kong’s Hang Seng advanced 2.59 per cent.
Commodities
Oil prices rose amid signs of easing inflationary pressures in the United States, the world’s biggest oil consumer, with Brent crude peaking above US$86 though it was still set for a weekly decline.
Brent crude futures advanced 0.57 per cent to US$85.89 a barrel, while West Texas Intermediate (WTI) crude futures climbed 0.84 per cent to US$83.31 a barrel.
In other commodities, gold prices fell but were still headed for a third straight week of gains.
Spot gold slipped 0.5 per cent to US$2,402.56 an ounce on profit taking after prices jumped 2 per cent yesterday. U.S. gold futures fell 0.6 per cent to US$2,407.80.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 73.31 US cents to 73.47 US cents in the early premarket period. The Canadian dollar was up about 0.87 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.13 per cent to 104.31.
The Japanese yen swung between losses and gains in volatile trade a day after Tokyo was believed to have stepped in to prop it up. Officials may have spent 3.37 trillion to 3.57 trillion yen supporting the currency yesterday, data suggest.
The euro rose 0.21 per cent to US$1.0892. The British pound gained 0.35 per cent to US$1.2959.
In bonds, the yield on the U.S. 10-year note was last up at 4.231 per cent ahead of the North American opening bell.
Economic news
8:30 am ET: Canadian building permits for May. It’s expected to be down 5 per cent after a 20.5 per cent surge in April.
8:30 am ET: U.S. producer price index. Prices rose 0.2 per cent in June last month after being unchanged in May, data show. The PPI increased and an annual rate of 2.6 per cent after advancing 2.4 per cent in May.
9 am ET: Canada existing home sales for June, which rose 3.7 per cent from May, and were down 9.4 per cent on an annual basis, CREA numbers indicate.
9 am ET: MLS home price index for June. It’s expected to be down 4 per cent from a year ago, steeper than May’s decline of 2.4 per cent.
10 am ET: University of Michigan consumer sentiment. Consensus is for a reading of 67.0, down from June’s 68.2.
With Reuters and The Canadian Press