What every Canadian investor needs to know today

equities

Major indexes in Canada and the United States opened on the backfoot on Friday, as investors remained cautious despite regional US bank First Republic’s efforts to stabilize.

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At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 87.72 points, or 0.45 percent, at 19,451.29.

The Dow Jones Industrial Average opened down 29.23 points, or 0.09%, at 32,217.32.

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The S&P 500 declined 1.59 points, or 0.04%, to 3,958.69, while the Nasdaq Composite dropped 20.93 points, or 0.18%, to 11,696.35.

The market found some early support in a non-traditional private sector rescue for US regional bank First Republic, designed to stem a looming crisis in the sector. The Globe’s Tim Kiladze and Stephanie Marotta report that the agreement was brokered by the US government, but is funded by the country’s 11 largest lenders and investment banks. Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, known as the Big Four US banks, are leading the effort with US$5 billion each. First Republic was down more than 13 percent in early trading on Friday.

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“The fact that American institutions banded together to preserve First Republic Bank sends a message to speculators that they should be careful when betting against the American financial system. Their actions showed that Wall Street Banks, as well as policymakers, stand ready to preserve the US financial system,” Naeem Aslam, chief investment officer at JAE Capital Markets, said in an opening note on Friday.

Traders now await the Federal Reserve rate announcement next week. A volatile week had led some to speculate that the central bank, which had previously been eyeing a 50-basis-point rate hike, could pullback. However, the European Central Bank on Thursday, faced with the need to balance fighting inflation with market volatility, opted to go ahead with a half-percentage point rate hike.

“The ECB’s clear focus on inflation, not bank stress, has strengthened expectations of a 25 bp hike from the Federal Reserve (Fed) next week,” said Ipek Ozkaredskaya, senior analyst at Swissquote.

“The ECB’s decision came as a signal that the Fed may also ease stress in the banking sector, highlighting that liquidity issues can be addressed with the tools available and focusing on economic data.” can be concentrated.

Meanwhile, the Paris-based OECD raised its forecast for global growth on Friday morning, citing subdued inflation but also warning of risks posed by higher interest rates.

The organization now expects global economic growth this year to be 2.6 percent, compared with the 2.2 percent forecast in its November outlook.

On the corporate side, Quebec-based cannabis Hexo Corp reported a net loss of $11.1 million in its latest quarter, compared with a loss of $690.3 million in the same period, which included $616 million in one-time impairment charges. one year ago. Hexo’s net revenue totaled $24.2 million in the second quarter, down 54 percent from a year ago and down 32 percent from the previous quarter.

On Friday morning, Algonquin Power & Utilities Corp is also due earnings.

Overseas, the pan-European STOXX 600 opened with gains but turned negative by late morning, falling 0.09 per cent. Britain’s FTSE 100 slipped 0.02 percent. Germany’s DAX and France’s CAC 40 lost 0.15 per cent and 0.20 per cent respectively.

In Asia, Japan’s Nikkei closed up 1.2 per cent. Hong Kong’s Hang Seng rose 1.64 percent.

Goods

Crude oil prices edged lower and looked set for their worst weekly performance since December amid broader market turmoil.

Brent ranged from US$74.45 to US$75.75 for the day in the early premarket period. The range on the West Texas Intermediate was US$68.07 to US$69.35.

Both the benchmarks posted modest gains on Friday morning and are down nearly 10 per cent for the week so far. This is the worst weekly decline since late last year.

“Monetary policy is becoming more restrictive as central banks continue to hike rates more,” said Ed Moya, senior analyst at OANDA.

“Global recession risks have never been higher and this is bad news for the crude oil demand outlook. The initial slide for crude may not last long though as traders may be confident that this will be the last rate hike for the ECB and the Fed will pause after another delivery next week.

Prices received some support on Thursday from reports that Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak discussed global markets and OPEC+’s efforts to maintain stability.

The two sides reaffirmed their commitment to OPEC+’s decision to cut production targets by two million barrels per day through the end of 2023, Reuters reported.

Meanwhile, gold prices looked poised for their best weekly performance since November as the global banking crisis increased bullion’s appeal as a safe-haven holding.

On Friday morning, spot gold was up 0.7 per cent at $1,931.90 an ounce. Bullion has gained nearly 3.4 per cent this week, heading for its third consecutive weekly gain.

US gold futures rose 0.7 per cent to USD 1,936.10.

“Last week’s rally in gold was impressive but it may be running out of steam,” said Mr. Moya.

“Wall Street is going to keep its eye on the banking sector but for this news cycle there is growing optimism that this banking crisis will be contained. If the news flow is more about efforts to support Credit Suisse and First Republic, then We can see risk appetite attempting a comeback here and this could cause gold to abandon the recent rally.

Currencies

The Canadian dollar was higher, helped by improved risk sentiment, while its US counterpart slipped against a basket of currencies in the wake of efforts to restore stability in the banking sector.

The day’s range on the loonie was from 72.79 US cents to 73.12 US cents in the prior period.

“This [the loonie] Trading slightly higher against the USD, but with gains of just under 0.2 percent on the session, not notable and the CAD underperforming relative to its commodity peers and the rest of the majors,” Sean Osborne, Scotiabank said the chief FX strategist.

“Improving risk appetite is a modest tailwind for the CAD vs USD, while US-Canada yields are less tight to the CAD following this week’s turmoil, they remain a drag.”

There were no major Canadian economic releases due Friday.

In world markets, the US dollar index, which weighs the greenback against a basket of currencies, fell 0.31 per cent to 104.07.

The euro, which saw a largely muted reaction to Thursday’s decision by the ECB to hike interest rates by half a percentage point, rose 0.33 percent to US$1.0647 as of Friday morning.

Britain’s pound rose 0.4 percent to $1.2159, while the Swiss franc rose 0.35 percent. Earlier this week, the franc posted its biggest one-day decline against the US dollar since 2015, according to Reuters.

In bonds, the yield on the US 10-year note was lower at 3.539 per cent ahead of the North American opening bell.