Equities
Global shares ticked higher after U.S. inflation data showed no worrying signs of gaining fresh ground last month, as expected, which fanned hopes for forthcoming rate cuts from the Federal Reserve.
Wall Street’s main indexes opened slightly higher:. The Dow Jones Industrial Average rose 28.8 points or 0.08 per cent at the open to 38,140.26. The S&P 500 rose 7.7 points or 0.15 per cent to 5,243.21, while the Nasdaq Composite rose 34.8 points or 0.21 per cent to 16,771.896
The S&P/TSX Composite Index opened 0.2 per cent higher at 22,115.6 after first quarter GDP numbers missed estimates, buoying hopes for a Bank of Canada interest rate cut next week.
In Canada, investors are getting results from Ski-Doo and Sea-Doo maker BRP Inc., Laurentian Bank of Canada and Canadian Western Bank.
“The big driver in the market at the moment is the same old story of when is the Fed going to pivot and start cutting rates,” said Mark Ellis, CEO of Nutshell Asset Management.
In Europe, inflation rose more than expected to an annual 2.6 per cent in May, today’s data revealed. But that’s unlikely to stop the European Central Bank from making a first interest rate cut next week.
Overseas, the pan-European STOXX 600 was up 0.4 per cent. Britain’s FTSE 100 advanced 0.44 per cent, Germany’s DAX was up 0.14 per cent and France’s CAC 40 also climbed 0.11 per cent.
In Asia, Japan’s Nikkei closed 1.14 per cent higher at 38,487.9, while Hong Kong’s Hang Seng slid 0.83 per cent to 18,079.61.
Commodities
Oil prices edged higher, with the market focused on Sunday’s OPEC+ meeting that will determine the fate of the producer group’s output cuts. Brent futures rose 0.2 per cent to US$81.98 a barrel, while West Texas Intermediate (WTI) crude was up 0.3 per cent at US$78.17.
In other commodities, spot gold extended its gains after U.S. inflation data, up 0.48 per cent to US$2,355.23 an ounce.
Currencies and bonds
The Canadian dollar strengthened against the greenback.
The day range on the loonie was 73.04 US cents to 73.38 US cents in the early premarket period. The Canadian dollar was up about 0.35 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, was trading at 104.41, on course for 1.4-per-cent decline in May, snapping a four-month winning streak.
The euro firmer at US$1.08777. The British pound declined 0.13 per cent to US$1.271.
In bonds, the yield on the U.S. 10-year note declined to 4.498 per cent following the U.S. inflation data release.
Other corporate news
BRP has recorded a first-quarter loss as revenues fell compared with a year earlier, saying it would lower production to reduce network inventory amid current macroeconomic challenges.
Laurentian Bank of Canada has reported a second-quarter loss of $117.5-million, compared with net income of $49.3-million a year earlier. The bank’s provision for credit losses totalled $17.9-million, up from $16.2-million in its second quarter last year.
Canadian Western Bank has raised its quarterly dividend to 35 cents per common share, up 1 cent from its previous quarter, as it reported its second-quarter profit rose compared with a year ago. Provisions for credit losses totalled $23.1-million compared with $10.3-million a year earlier.
Economic news
Canada’s real GDP for the first quarter grew at an annualized rate of 1.7 per cent, Statistics Canada says, below estimates of 2.3 per cent. Its preliminary estimate for April is growth of 0.3 per cent.
Canada’s monthly real GDP for March was essentially unchanged, according to Statscan, in keeping with consensus.
U.S. core PCE Price Index for April rose 0.3 per cent from March and 2.7 per cent from a year earlier, in line with consensus.
(8:30 a.m. ET) U.S. personal spending and income for April. The Street expects 0.3-per-cent increases from March for both.
(9:45 a.m. ET) U.S. Chicago PMI for May.
Ottawa’s budget balance for March.
With Reuters and The Canadian Press