October 4, 2024
What every Canadian investor needs to know today

Equities

Global markets were mixed near record highs in the wake of last week’s outsized interest rate cut by the U.S. Federal Reserve.

The benchmark S&P 500 and the Nasdaq opened higher as investors shifted their focus to comments from Fed policymakers and economic data lined up through the week.

The Dow Jones Industrial Average slipped 0.01 per cent at the open to 42,060.4, before reversing course. The S&P 500 rose 0.16 per cent to 5,711.9, and the Nasdaq Composite gained 0.26 per cent to 17,994.905 at the bell.

The Toronto Stock Exchange’s S&P/TSX composite index opened 0.03 per cent higher at 23,873.94.

The Fed’s move was “a bold decision that raised many questions across investment communities regarding the necessity of a jumbo size cut while the U.S. economy, though slowing, hasn’t necessarily given signs of plunging toward recession, Ipek Ozkardeskaya, senior analyst at Swissquote Bank, wrote in a note.

“The idea here is to ensure a soft-landing but if, instead, the aggressive rate cut – and the message that it sent to the market that the Fed is on track to do more – revives the inflationary pressures, then we could see optimism fade quickly.”

Overseas, the pan-European STOXX 600 was up 0.27 per cent in morning trading. Britain’s FTSE 100 was flat, Germany’s DAX gained 0.67 per cent and France’s CAC 40 fell 0.06 per cent.

In Asia, Japan’s Nikkei was closed for a holiday, while Hong Kong’s Hang Seng slipped 0.06 per cent.

Commodities

Oil prices were little changed in choppy trading after last week’s cut to U.S. interest rates and a dip in U.S. crude supply in the aftermath of Hurricane Francine countered weaker demand from top oil importer China.

Brent crude futures for November were down 0.1 per cent to US$74.43 a barrel, and West Texas Intermediate (WTI) crude futures for November gained 0.1 per cent to US$71.04.

“Oil looks rangebound despite the uplift to risky asset prices from an outsized policy rate cut by the Fed last week,” said Harry Tchilinguirian, head of research at Onyx Capital Group

In other commodities, spot gold rose 0.4 per cent to US$2,631.09 an ounce, after hitting a record high of US$2,634.16 earlier in the session. U.S. gold futures advanced 0.31 per cent to US$2,655.40.

Currencies and bonds

The Canadian dollar strengthened against its U.S. counterpart.

The day range on the loonie was 73.61 US cents to 73.83 US cents in early trading. The Canadian dollar was down about 0.65 per cent against the greenback over the past month.

The U.S. dollar index, which weighs the greenback against a group of currencies, advanced 0.23 per cent to 100.95.

The euro fell 0.44 per cent to US$1.1116. The British pound declined 0.11 per cent to US$1.3309.

In bonds, the yield on the U.S. 10-year note was last up at 3.768 per cent.

Other corporate news

Swedish battery maker Northvolt plans to lay off 1,600 employees in Sweden, or around one fifth of its global work force, as slower than expected demand for electric vehicles takes a heavy toll on the auto industry.

Economic news

Euro zone PMI survey showed business activity contracted sharply and unexpectedly this month as the bloc’s dominant services industry flatlined while a downturn in manufacturing accelerated.

(8:30 a.m. ET) Canada’s new housing price index for August. Estimate is a rise of 0.1 per cent from July and 0.1 per cent year-over-year.

(9:30 a.m. ET) U.S. S&P Global PMIs for September.

With Reuters and The Canadian Press

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