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Equity
Canada’s main stock index fell in Wednesday’s opening bell due to weaker crude oil prices and accelerating inflation, albeit at a slower pace than economists forecast. On Wall Street, the Nasdaq started in positive territory helped by Netflix Inc.’s earnings. from his latest gains.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S & P / TSX composite index was down 25.27 points, or 0.13 percent, to 18,912.44.
In the U.S., the Nasdaq Composite gained 12.94 points, or 0.11 percent, to 11,726.09 in the opening bell.
The Dow Jones Industrial Average was up 2.94 points, or 0.01%, at the open to 31,829.99, and the S&P 500 was down 1.37 points, or 0.03%, at 3,935.32.
“Earnings have been mixed, but nothing too terrible to worry investors,” said OANDA senior analyst Ed Moya.
“Shares have already dropped significantly this year and the disastrous outlook is what was needed to send major indices to new lows,” he said.
Shares of Netflix Inc. they rose about 1% in early negotiations after the broadcast giant said it lost about 970,000 subscribers in the second quarter, avoiding the worst-case scenario posed by the company in an initial forecast. Netflix had warned earlier this year that it could lose up to 2 million subscribers during the quarter.
In publishing its latest results, the company also outlined plans for a less expensive, advertising-supported level next year and said it expects to add 1 million new subscribers in the third quarter.
Following Wednesday’s close, markets will get results from Tesla Inc.
In Canada, investors had the last reading on inflation. Statistics Canada said early Wednesday that the annual rate of inflation rose to 8.1% in June, the highest since early 1983, from 7.7% in May. Some economists expected a higher figure and some predict a figure closer to 8.5 percent.
Statscan says the June acceleration was mainly due to rising gasoline costs, although price pressures remained widespread. Seven of the eight major components of the consumer price index rose 3% or more last month, the agency said.
“Another month, another Canadian inflation reading with decades, but this time lower than expected,” CIBC economist Karyne Charbonneau said in a note.
“As expected, gasoline prices continued to rise in June and were the main driver of the monthly increase. In what will certainly mean some relief for consumers, food prices did not rise, surprisingly, they remained stable at 8.8% annually, ”he said.
Outside, the pan-European STOXX 600 fell 0.6 percent after a positive day start. The German DAX lost 0.33% while the French CAC 40 lost 0.21%. The British FTSE 100 fell 0.23%.
In Asia, the Japanese Nikkei closed 2.67% after a strong Wall Street transfer. Hong Kong’s Hang Seng gained 1.11 percent.
Goods
Crude oil prices fell as traders monitored the situation of COVID-19 in China and waited for U.S. inventory figures later in the session.
The daily range in Brent is $ 105.44 to $ 107.42. The West Texas Intermediate range is from $ 102.40 to $ 103.91.
“Growing concern about COVID in China has limited oil prices and short-term contract action has shifted to the south despite a weaker USD and a supported risk,” said Stephen Innes, managing partner of SPI Asset Management.
China’s tough zero-COVID policy, along with new outbreaks, have raised concerns about the potential for new restrictions that could moderate demand on one of the world’s top oil consumers.
Meanwhile, traders will get U.S. government inventory figures shortly after the start of trading on Wednesday.
On Tuesday, the American Petroleum Institute said crude inventories rose 1.9 million barrels last week, close to market forecasts. Figures to be released later Wednesday by the U.S. Energy Information Administration will provide a more official count.
Energy markets have also been boosted by reports that Russian gas flows through the Nord Stream 1 pipeline are likely to resume in time tomorrow after maintenance. The pipeline accounts for more than a third of Russian natural exports to the European Union. It was closed for maintenance on July 11 and European governments had feared that Moscow would extend the closure as a tactic in its war in Ukraine.
In other commodities, gold prices fell at first.
Cash gold fell 0.2% to $ 1,707.95 an ounce early Wednesday morning. U.S. gold futures fell 0.3% to $ 1,705.50.
“Gold’s inability to maintain even modest price rises, even as the U.S. dollar falls and U.S. bonds trade sideways, is a major concern,” the OANDA senior analyst said Jeffrey Halley.
“The risk remains very sloping downwards.”
Coins
The Canadian dollar was slightly firmer, trading in a narrow range, while its US counterpart remained stable against a group of currencies.
The loonie’s day range is 77.62 US cents to 77.79 US cents. Investors got a lower-than-expected inflation reading before the start of trading. Statscan says the annual inflation rate reached 8.1% in June. Some economists had expected a figure closer to 8.5 percent.
“However, marginal expectations for an even warmer impression are not the same as a peak in inflation, and for this reason, the June CPI report is unlikely to force the Bank of Canada to review their internal plans for their interest rate trajectory, ”said Jay-Zhao Murray, Monex Canada’s foreign exchange market analyst.
In world markets, the US dollar index, which weighs the green dollar against a group of currencies, stood at around 106.6 on the day, according to Reuters data. Markets now expect only a 23 percent chance that the Federal Reserve will raise rates by a full percentage point at its policy meeting later this month.
Meanwhile, the euro was close to a two-week high against the US dollar ahead of Thursday’s European Central Bank rate decision. Reports have suggested that the central bank is weighing in on a rate hike of between 25 basis points and 50 basis points. It would be the ECB’s first rise in a decade.
In the early hours of Wednesday, the euro rose 0.5% to $ 1.02730, the highest since early June, before falling.
Elsewhere, the Australian dollar hit a three-week high of US $ 0.6927 after the country’s central bank hit a hawkish tone on future rate hikes.
In bonds, U.S. 10-year benchmark bond yields fell to 2.989%.
More company news
Merck & Co. Inc. said Wednesday that her Keytruda cancer therapy failed to achieve the primary goal of a late-stage trial testing her in patients with head and neck cancer.
Economic news
(830 am ET) June Canadian Consumer Price Index.
(830 am ET) Canada Industrial Product Price Index for June and Commodity Price Index.
(10:00 ET) Sales of existing homes in the United States for June.
With Reuters and The Canadian Press