Wall Street was set for a strong open on Thursday as better-than-expected results from Meta Platforms, Eli Lilly and Comcast outweighed data showing the U.S. economy slowed more than anticipated in the first quarter.
Meta Platforms Inc soared 14.6% in premarket trading as it forecast quarterly revenue above estimate, with CEO Mark Zuckerberg saying that Artificial Intelligence was increasing traffic to Facebook and Instagram and boosting ad sales.
Eli Lilly and Co advanced 3.1% on raising its full-year profit forecast, while Merck & Co gained 2.3% on better-than-expected first-quarter results.
Comcast Corp rose 4.9% as it beat estimates for quarterly revenue and profit, thanks to sustained demand for its broadband services and higher theme park attendance.
Raising worries about the economy, gross domestic product (GDP) increased at a 1.1% annualized rate last quarter, the Commerce Department said in its advance estimate for first-quarter growth, while economists polled by Reuters had estimated a 2.0% expansion.
“January was really the standout month and since then we’ve seen weakness in February and March, which has really been slowly dragging down the economy,” said Brian Klimke, investment director at Cetera Investment Management.
Despite the slowdown, which mostly reflected a drag from weak inventory investment, the Federal Reserve is expected to raise interest rates by another 25 basis points next week.
A separate report showed initial claims for state unemployment benefits decreased 16,000 to a seasonally adjusted 230,000 for the week ending April 22. Economists had expected 248,000 claims in the latest week.
The decline in first-quarter earnings is estimated to be smaller than analysts had expected at the start of the month, with a host of tech names such as Microsoft Corp and Alphabet reporting upbeat results this week.
Amazon.com Inc and Intel are among the big names set to report after markets close.
The S&P 500 closed at near one-month low on Wednesday after lingering concerns about a weakening U.S. economy were exacerbated by a fresh plunge in First Republic Bank’s shares after a report said the U.S. government was unwilling to engineer its rescue.
At 8:57 a.m. ET, Dow e-minis were up 163 points, or 0.49%, S&P 500 e-minis were up 23.5 points, or 0.58%, and Nasdaq 100 e-minis were up 133.75 points, or 1.04%.
The U.S. House of Representatives on Wednesday narrowly passed a bill to raise the government’s $31.4 trillion debt ceiling that includes sweeping spending cuts over the next decade. The bill is expected to get stalled in the Senate.
EBay Inc climbed 2.6% after the e-commerce company forecast current-quarter revenue above projections. (Reporting by Sruthi Shankar and Ankika Biswas in Bengaluru Editing by Vinay Dwivedi)
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.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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.
The Canadian Press. All rights reserved.
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.
The Canadian Press. All rights reserved.
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