By Ketki Saxena
Investing.com -- At 10:00 a.m in Toronto, the S&P/TSX Composite index was at 19,041.39 points, up 0.31% shortly after the opening bell. The Canadian index tracked U.S. equities higher ahead of mega-cap earnings this week and a 75 basis point hike expected by the Federal Reserve on Wednesday, and gained further support from a strengthening in crude prices.
While a 75 bps hike would still be a relatively aggressive move from the world’s most powerful central bank, the prospect is still significantly less hawkish than the 100 bps move markets had nearly fully priced in a few weeks ago.
Earnings optimism also buoyed North American equities this morning ahead of earnings from Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), Meta, Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) all expected this week.
The dollar’s strength at near two-decade highs is expected to provide headwinds for the mega caps due to their global presence.
The commodity-heavy Canadian index was further supported by the morning’s gains in crude, as worries of tight supply overshadowed the prospect of slowing economic growth and subsequent demand for the commodity.
Commodities
Oil prices rose today morning as the promised increased in Libyan output is expected to remain volatile. Libya's National Oil Corporation aims to bring back production to 1.2 million barrels per day (bpd) in two weeks, from around 860,000 bpd. However, political tensions and the potential for continued unrest that has so far slowed production and shuttered key ports remain high.
Supply is also expected to further tighten as Russia remains unwilling to supply its benchmark Ural crude to countries that impose a price cap on its oil, which may have the opposite effect that the price cap attempts to achieve.
Russia’s stance will also undercut the EU’s decision last week to allow Russian crude to be shipped through a third country, effectively creating a loophole in the bloc's self imposed sanctions on the Kremlin that would have allowed the EU to continue consuming Russian energy, on which it is heavily reliant.
Gold, meanwhile was modestly lower, weighed down by rising yields ahead of Fed Day.
Corporate
The big news on Bay Street this morning is Rogers Communications Inc (TSX:RCIa) plan to invest C$10 billion over the next three years in artificial intelligence, and increased testing and oversight following a massive nationwide service outage earlier this month. Rogers also announced it is splitting wireless and internet services to create an 'always on' network, and collaborating with other carriers to automatically switch 911 calls between networks.
Other stocks to watch today include Stelco (TSX:STLC) Holdings, as the steel-maker warned of materially lower third and fourth-quarter earnings, and AutoCanada, which announced a a $10-million write-down on its used vehicle inventory due to a “changing macro environment.”
Today’s major earnings include Celestica Inc. (TSX:CLS) with expected Q2 earnings at 42 cents per share.
Canadian Economics
Statistics Canada announced today that the business closure rate dropped 0.2% for a second consecutive month to 4.4%, below its historical average from 2015 to 2019, indicating a continued rebound in the Canadian economy following the lifting of Covid-19 restrictions.