Be smart with your money. Get the latest investment statistics straight to your inbox three times a week with the Globe Investor newsletter. Sign up today.
Equity
Wall Street futures fell early Wednesday after a rebound from the previous session as traders awaited further comments from Federal Reserve Chairman Jerome Powell. The main European markets fell, giving up the gains of the previous day. TSX futures were also weaker.
At the start of the pre-market period, futures linked to the top three U.S. indices were underwater, and Nasdaq futures were down about 2 percent at one point. On Tuesday, the Nasdaq ended up 2.51 percent, while the S&P 500 added 2.45 percent and the Dow gained more than 600 points. The S & P / TSX Composite Index ended 0.38% broadening the rebound from Friday’s loss on earnings from energy stocks.
On Wednesday, the markets will be watching closely the appearance of Mr. Powell on Capitol Hill is looking for indications of how aggressive the Fed will be when it comes to raising rates as it seeks to moderate high inflation.
“Jerome Powell’s half-yearly testimony could once again hurt the mood of the market, as the Fed chief is expected to reiterate his firm commitment to fighting inflation, even if it means an economy slower and a smoother job market, “senior Swissquote analyst Ipek Ozkardeskaya said in an opening note.
“Yesterday’s rebound in stocks could be another rebound from the dead cat, and we can see the market painted red in the coming sessions,” he said.
In this country, inflation is at the forefront with the release of Statistics Canada’s May Consumer Price Index figures before the start of trading.
The agency says the annual rate of inflation rose to 7.7% in May, the fastest pace since 1983. Economists expected an increase, but most were looking for a number closer to 7.4%. Statscan says higher gasoline prices were behind much of the rise, although price pressures continued to be broad-based.
Economists are increasingly expecting the Bank of Canada to raise rates at its next policy meeting by 75 basis points following a similar recent Fed move.
“Inflation was already well ahead of the Bank of Canada’s April projections ahead of today’s release, and is now even further ahead,” said Andrew Grantham, a senior CIBC economist.
“Higher-than-expected inflation figures will make markets even more likely to rise by 75 basis points in July.”
As for the companies, Canadian investors got results from Sobeys, the parent company of Empire Co. Ltd. before the start of negotiations. The retailer posted earnings per share in the last quarter of 68 cents, up from 64 cents a year earlier. Sales at the same stores excluding fuel fell 2.5 percent compared to high sales levels for COVID-19 last year, Empire said.
Abroad, the pan-European STOXX 600 fell 1.28 percent just before noon. The British FTSE 100 fell 1.11%. Germany’s DAX and France’s CAC 40 were down 1.76% and 1.58%, respectively.
In Asia, Japan’s Nikkei fell 0.37%. Hong Kong’s Hang Seng fell 2.56 percent due to weak technology stocks.
Goods
Crude oil prices fell at first with an expected move by US President Joe Biden to alleviate driver costs that tempered sentiment.
The daily range in Brent is US $ 108.62 to US $ 114.45. The range at West Texas Intermediate is $ 103.20 to $ 109.76. Both benchmarks fell by more than 4% during the pre-dawn period.
“There is a clear lack of engines behind this move, and there is certainly no headline to justify it,” said OANDA senior analyst Jeffrey Halley.
“I guess President Biden ‘s long – awaited announcement of a temporary suspension of federal fuel taxes [on Wednesday] has led to the sale, and I notice that the WTI contract focused on the United States is leading the lower charge. “
Biden is later expected to call for a temporary suspension of the U.S. federal gas tax, according to a Reuters report. The measure aims to address the high costs to consumers and increase inflationary pressures.
Later Wednesday, traders will also receive the first of two weekly U.S. inventory reports, with new figures from the American Petroleum Institute. More official government data will follow on Thursday morning.
In other commodities, gold prices fell alongside a firmer US dollar.
Cash gold fell 0.3% to $ 1,826.41 an ounce in the early hours of Wednesday morning, extending losses to a fourth straight session. U.S. gold futures fell 0.6% to $ 1,827.40.
“While the endless negotiation of gold ranks continued overnight, the falls of the last three sessions indicate that any upward momentum in the yellow metal is making an Elvis and leaving the building,” he said. dir Halley.
“Gold has been crushing lower, even as U.S. yields and the U.S. dollar trade sideways,” Halley said.
Coins
The Canadian dollar was weaker, hit by uncertain risk sentiment and falling commodity prices, while its US counterpart advanced ahead of a basket of world currencies.
The loonie’s day range is from 76.94 US cents to 77.43 US cents.
“CAD has softened overnight, with price action driven by the weaker risk context and falling energy prices,” said Shaun Osborne, chief currency strategist. of Scotiabank. “The CAD maintains a negative correlation, unfortunately strong, with US equities (-83 percent according to our measure), making it difficult to escape the gravitational pull of future S&P 500 sliders.”
Canadian investors will get inflation figures ahead of the start of negotiations with economists who expect to see another rise in price pressures.
In world markets, the US dollar index, which compares the green dollar with a currency group, rose 0.33% to 104.8, according to Reuters data.
The euro fell 0.4% to $ 1.0497.
The yen fell 0.3 percent to US $ 136.3 per cent after hitting 136.71 at the start of trading, its lowest level since October 1998, Reuters reports. .
Other commodity-linked currencies were also lower. The Norwegian krone fell 1.3 percent against the U.S. dollar. The Australian dollar fell 1.1% to US $ 0.6898 early Wednesday.
In bonds, U.S. 10-year bond yields were below 3.222%.
More company news
Susan Krashinsky Robertson of The Globe reports that Canada’s largest retailer is joining the fast-paced, increasingly competitive grocery delivery industry thanks to a partnership with its San Francisco headquarters. DoorDash Inc. Starting in August, Loblaw Cos. Ltd. will offer customers delivery in about 30 minutes or less, starting in Toronto and Winnipeg before expanding to 10 locations nationwide this month. In a few years, Loblaw expects to have between 40 and 50 PC Express fast delivery locations.
Brookfield Asset Managerst said Wednesday it had raised $ 15 billion for its Brookfield Global Transition Fund, a fund focused on investments in the decarbonization technology space.
Boeing expects supply chain problems to persist almost until the end of 2023, driven by labor shortages in mid-level and smaller suppliers, in part due to faster demand return than ‘I was waiting,’ said its chief executive on Wednesday. Boeing said last month that production of its 737 aircraft had slowed due to a shortage of a single type of wiring connector, while some of its airline customers had been forced to cancel flights to due to lack of staff in post-pandemic recovery. “The shift in demand to the current supply problems … is remarkable, the speed with which it happened,” Boeing CEO David Calhoun told Bloomberg’s Qatar Economic Forum in Doha.
Economic news
(8:30 am ET) May CPI for Canada.
(9:30 am ET) U.S. Fed Chairman Jerome Powell testifies before the Senate Banking Committee.
With Reuters and The Canadian Press