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Equity
Wall Street futures rose early Friday as markets sought stability after another deep defeat with the S&P 500 appearing to be at its worst since the start of the pandemic. The main European markets were also positive in the morning trading. TSX futures also won.
At first, futures linked to the three key U.S. indices rose as turbulent markets sought to find their starting point after another volatile week. The Nasdaq ended Thursday with a drop of more than 5%, while the S&P 500 lost more than 3%. The S&P 500 has been down about 6 percent so far, marking its worst weekly show since March 2020. The S & P / TSX Composite Index closed the session down 3.1 percent, reaching its lowest level in over a year.
Concerns about rates and fears of a possible recession have been key concerns for traders this week, as the Federal Reserve, the Bank of England and the Swiss National Bank have all raised rates. In the case of the Fed, it raised rates by three-quarters of a percentage point, the highest in decades. In the early hours of Friday, the Bank of Japan reversed the trend, keeping interest rates very low and borrowing costs forecasting would remain “current or lower.”
“Shocked investors are grateful for some calm and, for the time being, are finding solace in lower bond yields through a shelter offer due to the persistent stock market sell-off,” said Stephen Innes, managing partner of SPI Asset. The management said in a note.
“There is also a sense of relief that the BoJ stood firm in politics, as the last thing the market needed was another valve of waste capital to yield,” he said.
In Canada, Mark Rendell and Bill Curry of The Globe report that Finance Minister Chrystia Freeland did not offer a new recipe for controlling inflation and easing consumer tensions as prices rise in Canada. their highest levels in decades, but they promised Ottawa will focus. on fiscal moderation and helping those most in need. Ms. Freeland spoke in Toronto on Thursday afternoon.
Many economists now predict that the Bank of Canada will follow the Fed’s lead and raise the Fed’s interest rates by 75 basis points at its next policy meeting as it seeks to curb inflationary pressures. Canadians will have their next reading on inflation, as measured by the consumer price index, next week.
As for companies, Adobe’s shares fell about 3 percent in pre-market trading after the company’s latest results exceeded market forecasts, but it also cut its forecast for ‘income for the year. Adobe now expects annual revenue of $ 17.65 billion, compared to previous estimates of about $ 17.9 billion.
Abroad, the pan-European STOXX 600 was up 1.13 percent at noon. The British FTSE 100 gained 1.02%. Germany’s DAX and France’s CAC 40 rose 1% and 0.67%, respectively.
In Asia, the Japanese Nikkei fell 1.77% as a result of Wall Street sales. Hong Kong’s Hang Seng rose 1.1%, recovering from early losses.
Goods
Crude oil prices rose, reversing initial losses, but seemed prepared for weekly falls, as concerns about the economy as a whole and the potential impact on demand limited gains.
The daily range in Brent is US $ 118.59 to US $ 120.74. The range at West Texas Intermediate is $ 116.33 to $ 118.64. Both benchmarks were on their way to this week’s losses. For WTI, it would be the first weekly drop in eight.
“Once again, Brent crude and WTI saw some strong intraday sales as markets tried to trade a lot of central bank rises and possible recessions,” said OANDA senior analyst Jeffrey Halley.
“Unfortunately, none of this changes the fact that, despite these risks, the world still lacks OPEC + crude oil supply and global refining capacity, raising gasoline and diesel prices in an inflationary embrace.”
In other commodities, gold prices fell at first, hit by a higher US dollar, and seemed poised for its biggest weekly drop since mid-last month.
Cash gold fell 0.6 percent to $ 1,846.33 an ounce in the early hours of Friday morning. U.S. gold futures fell 0.1% to $ 1,849.00. Prices have fallen more than 1% so far in a volatile week.
“Despite this week’s noise, it still remains anchored in the middle of its one-month range,” Halley said. “Overnight price action shows the reverse correlation with the US dollar is as strong as ever.”
Coins
The Canadian dollar was weaker, trading just above 77 US cents during the pre-dawn period, while its US counterpart gained after the recent falls.
The loonie’s day range is from 76.99 US cents to 77.29 US cents.
There were no major Canadian economic communications on Friday’s calendar, which left the wolf moving alongside the broader market risk sentiment.
“CAD finds no support this morning for the rebound in risky assets, which has recently been a stronger correlation driver for CAD,” Scotiabank chief currency strategist Shaun Osborne said in an initial note.
In world markets, the US dollar index, which compares the green dollar with a six-currency basket, rose 0.6% to 104.48.
Meanwhile, the Japanese yen fell after the Bank of Japan went against the flow, keeping rates stable while other global counterparts are raising borrowing costs.
Compared to the yen, the US rose 1.6% to 134.14 yen after volatility immediately following the BOJ decision, according to a Reuters report. The yen reached a 135-year low of 135.6 per US dollar on Wednesday.
The Australian dollar, often seen as an indicator of risk sentiment, fell 0.9% to $ 0.6981 amid a mixed session for Asian equities.
In bonds, US 10-year benchmark yields fell moderately to 3.212% after a volatile week.
More company news
James Bradshaw of The Globe reports Imperial Bank of Commerce of Canada he raised his profit target in a show of confidence when CEO Victor Dodig on Thursday presented to investors that he had built a different and more reliable bank. CIBC raised its target growth rate for adjusted earnings by 7-10% annually through 2025 to 5-10%, and predicted similar levels of revenue growth in an investor presentation held at the its new Toronto headquarters. The bank also raised its net return on capital target from 15% to 16%.
Bausch Health Companies Inc said it was suspending plans for the initial public offering of its Solta Medical unit due to difficult market conditions. Bausch, formerly known as Valeant Pharmaceuticals, said he would review alternative paths for the medical cosmetics company Solta in the future.
Cannabis company Hexo Corp. says Zenabis Global Inc., a wholly owned subsidiary, has sought protection under the Corporate Creditors Agreement Act. The company says Zenabis filed the filing with the Quebec Superior Court to restructure its business and financial affairs. Hexo says the request is limited to the Zenabis Group. Neither Hexo nor any of its subsidiaries, except members of the Zenabis Group, are applicants or parties to the proceedings, the company says.
Economic news
(8:30 am ET) Canada’s commodity and industrial product price indices for May.
(8:30 am ET) April Canadian International Securities Transactions.
(9:15 am ET) US industrial production and capacity utilization for May.
(10:00 ET) US leading indicators for May.
With Reuters and The Canadian Press