Equities
Global stocks were mixed as investors tried to pull markets out of a tech-led tumble and attention turned to what signals the European Central Bank gave about future interest rate cuts.
The ECB kept rates unchanged as expected and gave no hints about its next move, arguing that domestic price pressures remain high and inflation will be above its target well into next year. Markets were hoping the central bank would signal a cut as early as September.
The Nasdaq and the S&P 500 rose at the open, as megacaps regained ground and upbeat forecast and results from Taiwan’s TSMC helped chip stocks recover from a sharp selloff yesterday.
The S&P 500 advanced 0.36 per cent to 5,608.56, and the Nasdaq Composite gained 0.68 per cent to 18,119.15. The Dow Jones Industrial Average slipped 0.10 per cent at the open.
The Toronto Stock Exchange’s S&P/TSX composite index dipped 0.14 per cent to 22,819.46 at the bell, hurt by losses in the materials sector as copper prices slid, offsetting a rebound in technology stocks that followed their Wall Street peers.
On Wall Street, markets are watching results from Netflix, Abbott Laboratories and Domino’s Pizza.
“I think this volatility spike is now leading to some broader risk reduction as investors worry about stretched positioning,” said Ben Bennett, Asia-Pacific investment strategist at Legal and General Investment Management.
Overseas, the pan-European STOXX 600 was up 0.44 per cent in morning trading. Britain’s FTSE 100 rose 0.71 per cent, Germany’s DAX advanced 0.29 per cent and France’s CAC 40 added 0.78 per cent.
In Asia, Japan’s Nikkei closed 2.36 per cent lower, while Hong Kong’s Hang Seng added 0.22 per cent.
Commodities
Oil prices were on the rise again, with Brent futures 0.4 per cent higher at US$85.45 a barrel and West Texas Intermediate (WTI) crude climbing 0.7 per cent at US$83.43. Both had registered gains in the previous session.
In other commodities, gold hovered near a record high scaled in the previous session, as rising anticipation of a U.S. interest rate cut in September lifted demand for non-yielding bullion.
Spot gold was up 0.3 per cent at $2,464.90 an ounce, after hitting an all-time high of US$2,483.60 on Wednesday. U.S. gold futures also climbed 0.3 per cent to US$2,468.20.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 73.04 US cents to 73.15 US cents in early trading. The Canadian dollar was up about 0.1 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.05 per cent to 103.80, not far from the four-month low touched yesterday.
The euro slid 0.05 per cent to US$1.0934. The British pound fell 0.18 per cent to US$1.2983.
In bonds, the yield on the U.S. 10-year note was last up at 4.183 per cent.
Japan’s yen scaled a six-week high against the U.S. dollar at 155.375 amid speculation of an sustained intervention to lift the frail currency away from 38-year lows.
Other corporate news
Domino’s Pizza fell short of market expectations for second-quarter same-store sales as U.S. consumers spent less on eating out or ordering in. Still, the pizza maker earned a profit of US$4.03 per share, compared with market expectations of US$3.68.
Abbott Laboratories raised its annual profit forecast and beat Wall Street estimates for second-quarter earnings, buoyed by strong sales of its cardiac and diabetes devices. On an adjusted basis, quarterly profit of US$1.14 per share beat analysts’ average estimate of US$1.10.
Economic news
ECB Monetary Policy Meeting
Japan consumer prices
UK consumer confidence and June retail sales
8:30 am ET: Canadian construction investment
8:30 am ET: U.S. initial jobless claims, which increased more than expected, but there was no material shift in the labour market.
10 am ET: U.S. leading indicator
With Reuters and The Canadian Press