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Canada’s main stock index opened higher on Wednesday supported by a rise in oil prices, as a surprise drop in U.S. crude inventories buoyed hopes for a recovery in demand.
E-commerce firm Shopify Inc. jumped over 11 per cent after it beat analysts’ estimates for quarterly revenue and profit on Wednesday, as more brick-and-mortar businesses listed on the Canadian e-commerce firm’s platform to cash in on the increase in number of people shopping online.
Shopify’s revenue doubles as COVID-19 sparks boom in online retail
At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 123.99 points, or 0.77%, at 16,245.31.
Wall Street’s main indexes opened higher on Wednesday as a slew of positive earnings updates and hopes for a dovish tone from the Federal Reserve overshadowed concerns about next steps for the government’s coronavirus support plan.
The Dow Jones Industrial Average rose 9.16 points, or 0.03%, at the open to 26,388.44. The S&P 500 opened higher by 8.78 points, or 0.27%, at 3,227.22, while the Nasdaq Composite gained 72.61 points, or 0.70%, to 10,474.70 at the opening bell.
Of the 163 S&P 500 firms that have reported results, 79.1% have surpassed a low bar of quarterly profit expectations, according to Refinitiv IBES data, well above the average of 59% of companies beating profit estimates over the past four quarters.
Recent data pointed to a possible slowdown in business and hiring as infections spiked in southern and western U.S. states, and deaths from the novel coronavirus approached 150,000 in the country on Wednesday.
Investors will keep a close watch on how the U.S. central bank addresses these economic risks at the end of its two-day meeting on Wednesday.
No major policy decisions are expected in the Fed’s statement at 2 p.m. ET, which will be followed by Chair Jerome Powell’s press conference.
Emergency monetary stimulus measures along with trillions of dollars in fiscal support have been pivotal in driving a sharp recovery in the U.S. stock markets since March.
“The biggest catalyst within the market right now — for at least the bullish sentiment — is where’s the next wave of liquidity,” said Andrew Smith, chief investment strategist, Delos Capital Advisors, based in Dallas.
Republicans in the U.S. Congress, White House and Democrats still struggled to find a deal on the $1 trillion coronavirus aid package, as the expiry of a $600-per-week enhanced coronavirus unemployment benefit loomed.
Oil prices rose on Wednesday after a surprise drop in U.S. crude inventories, but demand concerns amid record increases in COVID-19 infections in some U.S. states capped gains.
Brent crude futures rose 59 cents, or 1.4%, to $43.81 a barrel. U.S. West Texas Intermediate crude futures gained 47 cents, or 1.2%, to $41.51 a barrel.
Inventories of crude oil in the United States dropped by 6.8 million barrels last week to 531 million barrels, data from industry group the American Petroleum Institute showed on Tuesday.
Analysts’ expectations in a Reuters poll were for an increase of 357,000 barrels. U.S. government data is due later on Wednesday.
“A relief of 6.8 million barrels could normally help prices rise even further, but concerns over a new supply glut coming from August are capping gains,” Rystad Energy’s head of oil markets Bjornar Tonhaugen said.
Reuters.
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