By Ketki Saxena
Investing.com -- At 10:00 a.m in Toronto, the S&P/TSX composite index was at 18,704.11 points, up 1.68% in shortly after the opening bell as investors continued to pare back rate hike bets from the Federal Reserve following Friday’s U.S. retail sales data, and comments from key Fed policymakers. Fed Governor Christopher Waller and St. Louis Fed President James Bullard, typically considered hawks, commented last week on the advisability of a 75 basis point hike, rather than a `100 bps move from the Fed on the 27th of July.
Canadian investors meanwhile will be watching for domestic inflation data on Wednesday, expected to provide further guidance on future moves from the Canadian central bank, which upped rates by a surprise 100 bps last week.
The commodity heavy Canadian index was further supported by gains in crude and gold, and financials, which tracked their U.S. counterparts higher after better than expected results from Goldman Sachs Group (NYSE:GS) and Bank of America (NYSE:BAC).
Commodities
Base metals saw broad-based gains this morning, following China’s pledge of economic support as the government steps in to ease the pressure on China’s beleaguered property sector, easing concerns of a recession in the world’s second largest economy.
Crude was also nearly 3% higher in the morning’s trade, also supported by the expectation of rebound in China, and the reality that an increase in OPEC+ oil is unlikely to be forthcoming despite U.S. President Joe Biden’s optimism following his visit to the middle east and meeting with Saudi Crown Prince Mohammed Bin Salman.
Commodities were also supported by a retreating dollar, which lost ground against most major currencies this week, and by improving global sentiment as Fed rate-hike bets pared back.
In Canadian Economics
Today’s major economic data includes Canadian housing stars, which fell 3% in June compared to May, bringing the total number of housing starts to 273,841 units in June.
However the major story in Canadian economics today are the weekend’s remarks from the two most powerful economic policymakers in the country: Bank of Canada governor Tiff Macklem, and Deputy Prime Minister/Finance Minister Chrystia Freeland, both of whom are confident on a soft-landing in the country, with the BoC governor remarking that “One and three-quarters growth (next year) is positive growth. The economy is still growing. That's the soft landing. It's not a recession.”
Corporate
The big news on Bay Street this morning is an announcement from Suncor Energy Inc (TSX:SU) regarding a deal with activist investor Elliott Investment Management LP. Elliot will undertake a strategic review of Suncor’s downstream retail business in order. Three new independent directors will also join the company’s board, with the goal of “unlocking shareholder value”. The Canadian energy company has drastically underperformed its peer benchmarks in the last quarter.
Other major news regards Shopify (TSX:SHOP) Inc, which saw its target price cut from to $38 from $60by Piper Sandler, factoring in FX headwinds and intensifying global economic risk factors.
Major earnings today include PrairieSky Royalty (TSX:PSK) Ltd. (Q2), with EPS projects 38 cents, compared to 27 cents in the prior-year quarter.
Platinum Group Metals Ltd (TSX:PTM) is also expected to report q3 earnings today, with EPS projects a loss of three cents, compared to a gain of three cents in the prior-year quarter.