Equities
Global markets searched for direction as investors braced for a busy day headlined by the U.S. Federal Reserve’s interest-rate decision and earnings from technology heavyweights.
Wall Street futures pointed higher after the three major stock indexes closed at fresh record highs yesterday, buoyed by an AI rally including chip giant Nvidia. Dow futures were up 0.1 per cent, S&P futures rose 0.3 per cent and Nasdaq futures were 0.4 per cent higher as of 7:15 a.m. ET.
TSX futures were muted ahead of the Bank of Canada interest-rate announcement later this morning. The central bank is expected to make another quarter-point cut to 2.25 per cent.
In Canada, investors are getting results from Canadian Pacific Kansas City Ltd., Gildan Activewear Inc., Agnico Eagle Mines Ltd., Algoma Steel Group Inc., Alamos Gold Inc., Capital Power Corp. and Ivanhoe Mines Ltd.
On Wall Street, markets are watching earnings from Alphabet Inc., Microsoft Corp., Meta Platforms Inc., Caterpillar Inc., Boeing Co., Verizon Communications Inc., Starbucks Corp., Kraft Heinz and Dayforce Inc.
With the “Magnificent Seven” tech titans Microsoft, Alphabet and Meta reporting earnings, there are lofty expectations for them to deliver strong results that would justify stretched valuations.
“Expectations are sky-high, and the bar for disappointment is high too,” said Charu Chanana, chief investment strategist at Saxo.
“Investors want to see not just solid numbers but evidence of sustained AI monetization and broadening demand beyond the initial boom. That’s where the market will judge if this AI boom is becoming a bubble or not.”
Overseas, the pan-European STOXX 600 was up 0.11 per cent in morning trading. Britain’s FTSE 100 rose 0.46 per cent, Germany’s DAX inched down 0.04 per cent and France’s CAC 40 gave back 0.07 per cent.
In Asia, Japan’s Nikkei closed 2.17 per cent higher, while Hong Kong’s Hang Seng declined 0.33 per cent.
Commodities
Oil prices were steady on a decline in U.S. crude inventories and optimism over a meeting between the leaders of the U.S. and China, the world’s two largest oil consumers.
Brent crude futures were up 0.2 per cent to US$64.54 a barrel. West Texas Intermediate (WTI) crude futures gained 0.1 per cent to US$60.21.
The surprise draws on inventory in the U.S. helped prices this morning, but the interplay of sanctions risks and OPEC+’s posture is driving markets, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
“That doesn’t mean the rally has unlimited upside. Because while the sanctions/supply story has been built up, the demand side still shows softness and spare capacity remains,” Sachdeva said.
In other commodities, spot gold was up 1.9 per cent at US$4,028.05 an ounce, after dropping to its lowest since Oct. 6 yesterday. U.S. gold futures for December delivery gained 1.5 per cent to US$4,041.50 an ounce.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 71.68 US cents to 71.82 US cents in early trading. The Canadian dollar was down about 0.04 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, rose 0.2 per cent to 98.87.
The euro slipped 0.06 per cent to US$1.1646. The British pound dropped 0.36 per cent to US$1.3224.
In bonds, the yield on the U.S. 10-year note was last up at 3.993 per cent.
Economic news
*Note: Scheduled U.S. data reports may not be released if the government shutdown isn’t resolved.
Bank of Japan’s policy meeting begins (through Thursday)
ECB monetary policy meeting
Euro zone GDP, jobless rate and economic and consumer confidence
Germany, GDP, unemployment and CPI
8:30 a.m. ET: U.S. goods trade deficit for September.
8:30 a.m. ET: U.S. wholesale and retail inventories for September.
9:45 a.m. ET: Bank of Canada policy decision. Press conference follows at 10:30 a.m. ET
10 a.m. ET: U.S. pending home sales for September.
2 p.m. ET: U.S. Fed announcement with Chair Jerome Powell’s press briefing to follow.
With Reuters and The Canadian Press