By Ketki Saxena
Investing.com --- At 10:15 a.m in Toronto, the S&P/TSX Composite index was at 19,266.80 points, up 0.19% in the day’s trading.
The commodity heavy Canadian index was supported by gains in crude, helping it outperform U.S. benchmarks this morning as investors digested remarks from Fed Chair Jerome Powell, who warned of the dangers of prematurely loosening policy before inflation is fully in control.
Further to today’s remarks, as well as recent data signaling strength in the U.S. economy, money markets do not expect an over 80% chance of a 75 bps hike from the Fed later this month.
After yesterday’s bruising sell-off - which saw crude shed over $4 a barrel and settle below $90 - its lowest level since the Russian invasion of Ukraine, the commodity gained support today from the introduction of price caps on Russian energy by the EU, and the near-certainty that Russian President Vladimir Putin will make good on his threat to stop all exports of Russian energy to the EU.
However, both WTI and Brent benchmarks remain below the $90 level while worries of rate-hike driven demand destruction continue to weigh, global central bankers remain steadfastly hawkish, and following an unprecedented 75 bps hike from the European Central Bank prior to the opening of the North American session.
Crude is also being pressured by ongoing - and recently extended - lockdowns in China, the world’s second largest importer of crude. China's Chengdu extended a lockdown for most of its 21 million residents on Thursday, and elsewhere in the country implemented travel bans prior to the upcoming holidays. while millions more in other parts of the country were told to shun travel in upcoming holidays.
TSX Stocks to Watch Today
- An Australian competition regulator says it will rescind its opposition to a A$2.47 billion acquisition of Link Administration Holdings by Canada's Dye & Durham, subject to the Canadian company divesting its existing local business, as stated in Dye & Durham court-enforceable pledge.
- RBC (TSX:RY) Dominion Securities analyst Greg Pardy reiterated his bullish stance on Canadian Natural Resources Ltd (TSX:CNQ), citing confidence in the company’s operating momentum, capital discipline and free cash flow generation.
- A range of analysts, including at Canaccord Genuity (TSX:CF) raised their price targets on Descartes Systems (TSX:DSG) Group Inc following better-than-expected second-quarter results and modestly increased estimates.
- Credit Suisse (SIX:CSGN) cut its target price on Lundin Mining Corp, citing its concern that the Canadian government may impose sanctions against the company over the sinkhole formed near its Candelaria mine complex and on revised commodity prices.
- National Bank Financial analyst Vishal Shreedhar downgraded his rating on Empire company, citing its business mix as likely to “cause a drag on performance versus peers” ahead of Q1 2023 results to be reported next week.
Canadian Stocks Moving Markets this Morning
Top gainers:
- Dye and Durham (TSX:DND) (+6.80%)
- First Quantum Resources (+3.79%)
- Capstone Mining (TSX:CS) (+3.77%)
Top Losers:
- North West (-8.63%)
- Equinox Gold (TSX:EQX) (-8.46%)
- Descartes Systems (-3.57%)
In Canadian Economics
Major Canadian economics data today includes the release of Securities Statistics by Statistics Canada. StatsCan notes that at the end of the second quarter, the outstanding value of Canadian debt securities reached $5,339.6 billion, up $104.6 billion from the previous quarter. The increase was driven by debt securities, such as bonds, Treasury bills and commercial paper.
In addition to net borrowings, the depreciation of the Canadian dollar against the US dollar also contributed to the increase.