Equities
Global markets sunk as weak U.S. economic data fuelled concerns of an imminent slowdown and tech stocks were hit amid a record selloff for AI chipmaker Nvidia.
Wall Street’s main indexes opened lower as fresh worries over the health of the U.S. economy kept investors on the sidelines.
The Dow Jones Industrial Average fell 0.16 per cent to 40,872.06, the S&P 500 was down 0.40 per cent at 5,506.68, and the Nasdaq Composite dropped 0.7 per cent to 17,015.71 at the bell.
The Toronto Stock Exchange’s S&P/TSX composite index opened 0.21 per cent lower at 22,995.09 ahead of the latest policy announcement by the Bank of Canada, which cut its key lending rate to 4.25 per cent, as widely expected.
In Canada, investors are getting results from Alimentation Couche-Tard Inc. and Descartes Systems Group Inc.
On Wall Street, markets are watching earnings from Dollar Tree Inc., Hewlett Packard Enterprise Co. and Dick’s Sporting Goods Inc.
“The slowing U.S. growth and soft data boost the recession worries and rate cut expectations,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.
“The rate cut expectations favour a sector rotation from highly valued Big Tech toward the non-tech pockets of the market. But the expectation of jumbo rate cut is bad for all stocks, regardless of their technology exposure.”
Overseas, the pan-European STOXX 600 was down 1.06 per cent in morning trading. Britain’s FTSE 100 gave back 0.57 per cent, Germany’s DAX declined 0.82 per cent and France’s CAC 40 retreated 1 per cent.
In Asia, Japan’s Nikkei closed 4.24 per cent lower, while Hong Kong’s Hang Seng dropped 1.1 per cent.
Commodities
Oil prices rebounded from an extended sell-off, after sources from OPEC+ told Reuters the producer group was discussing delaying a planned output increase in October
Brent crude futures rose 0.6 per cent to US$74.20, while West Texas Intermediate crude (WTI) futures were up 0.8 per cent at US$70.89.
“If OPEC+ does not provide reassurance that current output cuts would be extended more indefinitely, then the market could lose faith in OPEC+ defending the $70/bbl level,” Citi analysts wrote in a note.
In other commodities, spot gold fell 0.2 per cent to US$2,488.11 an ounce, and U.S. gold futures dipped 0.2 per cent to US$2,519.10.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 73.71 US cents to 73.90 US cents in early trading. The Canadian dollar was up about 1.54 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, slid 0.16 per cent to 101.67.
The euro gained 0.12 per cent to US$1.1057. The British pound advanced 0.12 per cent to US$1.3130.
In bonds, the yield on the U.S. 10-year note was last down at 3.834 per cent.
Other corporate news
Canadian Western Bank shareholders have overwhelmingly voted in favour of a sale of the company to National Bank of Canada at a special meeting yesterday.
Discount store operator Dollar Tree has cut its annual sales forecast as it struggled to lure in price-sensitive shoppers for its more profitable higher-margin goods amid sticky inflation.
Economic news
China, Japan and Euro zone services and composite PMI
(8:30 a.m. ET) Canada’s merchandise trade balance for July, which recorded a surplus of $684-million as imports declined faster than exports.
(8:30 a.m. ET) U.S. goods and services trade deficit for July, which widened sharply as businesses front-loaded imports in anticipation of higher tariffs on goods, suggesting that trade could remain a drag on economic growth in the third quarter.
(9:45 a.m. ET) Bank of Canada’s policy announcement (with press conference to follow at 10:30 a.m.)
(10 a.m. ET) U.S. factory orders for July. Consensus is a rise of 4.7 per cent from June.
(10 a.m. ET) U.S. Job Openings & Labor Turnover Survey for July. Openings dropped to a 3-1/2-year low, suggesting the labour market was losing steam, but probably not enough for the Federal Reserve to consider a big interest rate cut this month.
(2 p.m. ET) U.S. Beige Book is released
Also: Canadian and U.S. auto sales for August.
With Reuters and The Canadian Press