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Canada’s main stock index rose at the opening bell on Friday, marking a sixth straight session of gains, on the back of a better-than-expected reading on retail sales. On Wall Street, indexes were mixed in early trading with the tech-heavy Nasdaq lower after disappointing results hit shares of Snap Inc.
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite was up 58.51 points, or 0.31 percent, at 19,121.36. The TSX has posted gains in the previous five sessions.
In the US, the Dow Jones Industrial Average rose 131.02 points, or 0.41%, at the open to 32,167.92.
The S&P 500 opened down 0.52 points, or 0.01 percent, at 3,998.43, while the Nasdaq Composite fell 34.24 points, or 0.28 percent, to 12,025.37 at the opening bell.
All three US indexes are on track for weekly gains.
Early Friday, shares of Snap Inc. plunged 35 percent in early trading after the company’s latest quarterly results disappointed investors. Revenue for the second quarter ended June 30 was $1.11 billion, up 13% from the year-ago quarter. However, the number also fell short of the $1.14 billion that analysts were expecting. The company also said it planned to slow down hiring.
“Snap’s results were a warning to other Big Tech names that rely on ad revenue,” Stephen Innes, managing partner at SPI Asset Management, said in a note.
“So FAANG stocks, which rallied yesterday to a nearly two-month high, may not extend the gains into the weekly close, as Snap’s latest results could reverse the appetite for at least a couple of ’em, including Google and Meta before the closing bell.”
Meanwhile, Twitter Inc. reported a decline in revenue for the quarter citing industry headwinds due to the macro environment and uncertainty related to Elon Musk’s takeover bid. The two sides are now facing off in court after Mr. Musk pulled out of the deal. The social media company reported second-quarter revenue of $1.18 billion, compared to $1.19 billion a year earlier. Analysts were expecting $1.32 billion, according to Refinitiv IBES data. Twitter shares were trading lightly after the opening bell.
In Canada, investors got a better-than-expected reading on retail sales. Statistics Canada says sales rose 2.2 per cent in May. Economists had been looking for an increase of around 1.6 percent. Sales increased in 8 of the 11 subsectors, led by increased sales at gas stations and vehicle and motor parts dealers. Sales increased in all provinces.
“The advance estimate for June suggested a slowdown in sales to 0.3%, which would represent a decline in volume terms,” CIBC economist Katherine Judge said. “Indeed, as consumption shifts to services, while inflation erodes consumer purchasing power, demand for discretionary goods will be under more pressure going forward.”
However, the agency also said it expects sales to decline in June, with an initial estimate pointing to 0.3 percent growth for the month.
In Asia, Japan’s Nikkei ended 0.40 percent higher despite seeing losses earlier in the session. Hong Kong’s Hang Seng added 0.17 percent.
Merchandise
Crude oil prices struggled in a choppy session on demand concerns versus continued worries about tight supply.
The daily range in Brent is US$103.20 to US$105.72. The range in West Texas Intermediate is $95.65 to $97.95. Both benchmarks are sitting around 3 percent on Thursday.
“Fears of global recession and the resumption of Russian gas flows to Europe appear to have been the catalyst [for the previous session’s losses]although I’m sure the recent trading volatility is also reducing liquidity, exacerbating the moves,” said Jeffrey Halley, senior analyst at OANDA.
SPI Asset Management’s Stephen Innes also noted that traders are now looking ahead to next week’s Federal Reserve rate decision as recession fears cloud the demand outlook.
“While 75 [basis-point rate hike] is on the cards, guidance will be important and any softening in the rate hike outlook would be great for global growth,” he said.
In other commodities, gold prices eased slightly amid a stronger US dollar and continued rate hikes by global central banks.
Spot gold was down 0.2% at $1,715.93 an ounce early Friday morning. Prices fell to their lowest level in more than a year on Thursday at US$1,680.25, before ending up 1.3 percent. Gold has gained 0.5% so far this week, according to Reuters.
US gold futures rose 0.3% to $1,717.70 an ounce.
coins
The Canadian dollar was little changed as its US counterpart advanced against a group of global currencies.
The loonie’s day range is 77.44 US cents to 77.74 US cents. The dollar was closer to the upper end of this spread in the pre-dawn period. The Canadian dollar is up more than 1% against the greenback so far this week.
“Risk sentiment and the broader tone in the USD are likely to set the tone for CAD largely in the session, but CAD’s weekly gain looks impressive,” said Shaun Osborne, currency strategist at head of Scotiabank.
In global markets, the US dollar index, which compares the greenback against six major peers, rose 0.52% to 107.17, after falling 0.34% during the session previous The index is down about 0.79 percent for the week so far and looks headed for its first losing week in four, according to Reuters figures.
The euro was down 0.8 percent at $1.0152, slightly off Thursday’s high of $1.0279 after the ECB’s first rate hike in 11 years.
The British pound fell 0.4 percent to $1.1955, paring the week’s gain to 0.72 percent, Reuters reports.
In bonds, the yield on the benchmark US 10-year note was lower at 2.811%.
More company news
Based in Calgary Bonterra Energy Corp. says George Fink will retire as the company’s president and CEO effective Sept. 6. Mr. Fink will remain on Bonterra’s board. Patrick Oliver will succeed Mr. Fink in office and will join the board.
American Express Co reported a 14 percent drop in quarterly profit on Friday as higher costs and a rise in provisions for potentially sour loans overshadowed record spending by cardholders. Net income fell to $1.96 million, or $2.57 per share, in the three months ended June 30, from $2.28 million, or $2.8 per share, a year earlier before. But cardmember adjusted spending rose 30 percent as customers, unfazed by decades of high inflation, spent heavily on travel and entertainment.
Verizon Communications Inc cut its annual adjusted profit forecast after adding fewer monthly bill-paying phone subscribers than expected in the second quarter, a sign that red-hot inflation has begun to affect its business. The US wireless carrier added 12,000 net telephony subscribers who pay a monthly bill in the quarter compared with FactSet estimates of 150,800 additions. In the first quarter, Verizon had lost about 36,000 subscribers. The company now expects 2022 adjusted earnings per share in the range of US$5.10 to US$5.25 per share, down from previous forecasts of US$5.40 to US$5.55.
Economic news
Euro area manufacturing, services and composite PMIs. The UK publishes consumer confidence, retail sales and PMIs.
(830 am ET) Canadian retail sales for May.
(945 am ET) US S&P Global PMIs for July.
With Reuters and The Canadian Press