Before the Bell: Today, Canadian investors need to be informed about the changing global dynamics that can impact their portfolios. From the mixed performance of equities in global markets to fluctuations in commodities and currencies, here’s a comprehensive look at what every Canadian investor needs to know today.
Equities
Global markets displayed a mixed performance recently, with tech valuations causing renewed concerns among investors. The weak forecast from Oracle offset the relief brought about by the U.S. Federal Reserve’s less aggressive comments following its decision to cut interest rates.
Wall Street futures were trending in negative territory. Specifically, Dow futures were down by 0.21 per cent, S&P 500 futures fell by 0.56 per cent, and Nasdaq futures were 0.77 per cent lower. These figures were accurate as of 6:25 a.m.
On the Canadian front, the TSX futures followed the sentiment lower, even though Canada’s main stock market had closed at a new record high the previous day.
Canadian investors also had their eyes on the results from Dollarama Inc., Empire Co. Ltd., and Lululemon Athletica Inc. Meanwhile, U.S. markets were closely monitoring earnings from Costco Wholesale Corp. and Broadcom Inc.
Oracle’s performance cast a shadow over the initial positive tone from the Fed cut, with much of the focus being on the capex spend, which has revived concerns about returns on AI investment, according to ANZ’s Head of Asia Research, Khoon Goh.
Global Market Performance
Overseas, the pan-European STOXX 600 showed an increase of 0.22 per cent in morning trading. Britain’s FTSE 100 rose by 0.17 per cent, Germany’s DAX advanced by 0.05 per cent, and France’s CAC 40 gained 0.39 per cent.
In Asia, Japan’s Nikkei closed 0.9 per cent lower, while Hong Kong’s Hang Seng edged down by 0.04 per cent.
Commodities
There was a slight easing in oil prices as investors shifted their focus back to the Russia-Ukraine peace talks and observed the potential fallout from a U.S. seizure of a sanctioned oil tanker off the coast of Venezuela. Brent crude futures fell by 1.3 per cent to US$61.40 a barrel, and West Texas Intermediate (WTI) crude dropped by 1.3 per cent to US$57.68 a barrel.
“So far, the seizure has not trickled down to the market, but further escalation will impose heavy crude price volatility,” warned Emril Jamil, a senior oil analyst at LSEG.
Other commodities also witnessed changes, with spot gold falling by 0.3 per cent to US$4,217.09 an ounce, while U.S. gold futures for February delivery gained 0.5 per cent to US$4,244.70 an ounce.
Currencies and Bonds
The Canadian dollar weakened against its U.S. counterpart. The day range on the loonie was 72.33 US cents to 72.55 US cents in early trading. Over the past month, the Canadian dollar has appreciated about 1.7 per cent against the greenback.
On the other hand, the U.S. dollar index, which measures the greenback against a group of currencies, fell 0.27 per cent to 98.52. The euro climbed 0.15 per cent to US$1.1715, while the British pound inched up 0.01 per cent to US$1.3384.
In the bond market, the yield on the U.S. 10-year note was last down at 4.140 per cent.
Economic News
At 8:30 a.m. ET, Canada’s merchandise trade balance for September was expected to be released, along with Canada’s national balance sheet and financial flow accounts for Q3. In the U.S., initial jobless claims for the week of Dec. 6 were estimated to be 215,000, up 24,000 from the previous week. The U.S. goods and services trade deficit for September and quarterly services survey for Q3 were also scheduled to be announced.
