Wall Street appeared headed for gains when the market opens on Tuesday after recent losses dragged some benchmarks to their lowest levels in more than a year as war, inflation and rising interest rates have rattled investors in 2022.
Futures for the S&P 500 and the Dow Jones Industrial Average were each 0.7% higher.
Investors anxious about recent and potential future rate hikes and the Russian invasion of Ukraine have sent markets spiraling in recent months.
On Monday, the S&P 500 fell 3.2% and finished down 16.8% from its Jan. 3 record. The Dow fell 2% while the Nasdaq composite slid 4.3%.
Most Asian stock markets followed the U.S. lower overnight, while Europe trended higher in midday trading Tuesday.
The Federal Reserve is trying to cool inflation that is running at a four-decade high, but investors worry that might trigger a U.S. downturn. That adds to pressure from Russia’s war on Ukraine and a slowing Chinese economy.
Traders are pricing in the “impending deterioration of economic conditions,” said Yeap Jun Rong of IG in a report.
U.S. stocks have declined as the Fed turns away from a strategy of pumping money into the financial system, which boosted prices.
The U.S. central bank has raised its key rate from close to zero, where it sat for much of the coronavirus pandemic. Last week, it indicated it will double the size of future increases from its usual margin.
Shares in the interactive exercise company Peloton tumbled 24% in premarket trading as the former pandemic darling of investors reported another quarter of lackluster earnings. The company’s shares, now trading for around US$10 each, have lost more than 90% of their value since Christmas of 2020.
Biohaven shares jumped more than 70% in premarket trading after Pfizer said it would pay $11.6 billion for the remaining portion of the migraine treatment maker it does not already own.
At midday in Europe, the FTSE 100 in London gained 0.5%, Frankfurt’s DAX added 1.1% and the CAC 40 in Paris gained 0.6%.
In Asia, the Nikkei 225 in Tokyo lost 0.6% to 26,167.10 and Hong Kong’s Hang Seng dropped 1.8% to 19,633.69.
The Shanghai Composite Index gained 1.1% to 3,035.84 after the Chinese government told local authorities to help small businesses pay rent and other expenses in a new effort to boost anemic economic growth.
The Kospi in Seoul shed 0.6% to 2,596.56 and Sydney’s S&P-ASX 200 declined 1% to 7,051.20.
India’s Sensex advanced 0.3% to 54,623.12. New Zealand, Singapore and Jakarta retreated while Bangkok gained.
In energy markets, benchmark U.S. crude slipped $1.49 to $101.60 per barrel in electronic trading on the New York Mercantile Exchange. The contract had plunged $6.68 to $103.09 on Monday. Brent crude, the price basis for international oil trading, fell $1.66 to $104.28 per barrel in London. It fell $6.45 the previous session to $105.94.
The dollar declined to 129.98 yen from Monday’s 130.32 yen. The euro edged lower to $1.0563 from $1.0566.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
OTTAWA – Canada’s inflation rate fell to two per cent last month, finally hitting the Bank of Canada’s target after a tumultuous battle with skyrocketing price growth.
The annual inflation rate fell from 2.5 per cent in July to reach the lowest level since February 2021.
Statistics Canada’s consumer price index report on Tuesday attributed the slowdown in part to lower gasoline prices.
Clothing and footwear prices also decreased on a month-over-month basis, marking the first decline in the month of August since 1971 as retailers offered larger discounts to entice shoppers amid slowing demand.
The Bank of Canada’s preferred core measures of inflation, which strip out volatility in prices, also edged down in August.
The marked slowdown in price growth last month was steeper than the 2.1 per cent annual increase forecasters were expecting ahead of Tuesday’s release and will likely spark speculation of a larger interest rate cut next month from the Bank of Canada.
“Inflation remains unthreatening and the Bank of Canada should now focus on trying to stimulate the economy and halting the upward climb in the unemployment rate,” wrote CIBC senior economist Andrew Grantham.
Benjamin Reitzes, managing director of Canadian rates and macro strategist at BMO, said Tuesday’s figures “tilt the scales” slightly in favour of more aggressive cuts, though he noted the Bank of Canada will have one more inflation reading before its October rate announcement.
“If we get another big downside surprise, calls for a 50 basis-point cut will only grow louder,” wrote Reitzes in a client note.
The central bank began rapidly hiking interest rates in March 2022 in response to runaway inflation, which peaked at a whopping 8.1 per cent that summer.
The central bank increased its key lending rate to five per cent and held it at that level until June 2024, when it delivered its first rate cut in four years.
A combination of recovered global supply chains and high interest rates have helped cool price growth in Canada and around the world.
Bank of Canada governor Tiff Macklem recently signalled that the central bank is ready to increase the size of its interest rate cuts, if inflation or the economy slow by more than expected.
Its key lending rate currently stands at 4.25 per cent.
CIBC is forecasting the central bank will cut its key rate by two percentage points between now and the middle of next year.
The U.S. Federal Reserve is also expected on Wednesday to deliver its first interest rate cut in four years.
This report by The Canadian Press was first published Sept. 17, 2024.
FREDERICTON – New Brunswick‘s finance minister says the province recorded a surplus of $500.8 million for the fiscal year that ended in March.
Ernie Steeves says the amount — more than 10 times higher than the province’s original $40.3-million budget projection for the 2023-24 fiscal year — was largely the result of a strong economy and population growth.
The report of a big surplus comes as the province prepares for an election campaign, which will officially start on Thursday and end with a vote on Oct. 21.
Steeves says growth of the surplus was fed by revenue from the Harmonized Sales Tax and federal money, especially for health-care funding.
Progressive Conservative Premier Blaine Higgs has promised to reduce the HST by two percentage points to 13 per cent if the party is elected to govern next month.
Meanwhile, the province’s net debt, according to the audited consolidated financial statements, has dropped from $12.3 billion in 2022-23 to $11.8 billion in the most recent fiscal year.
Liberal critic René Legacy says having a stronger balance sheet does not eliminate issues in health care, housing and education.
This report by The Canadian Press was first published Sept. 16, 2024.
