Canada’s main stock index opened lower on Wednesday, led by declines in the healthcare and energy sectors.
The Toronto Stock Exchange’s S&P/TSX composite index was down 50.36 points, or 0.32 per cent, at 15,529.38.
Marijuana producers led an over 5-per-cent drop in the health care sector. Aurora Cannabis Inc. fell 9.7 per cent, while Aphria Inc. and Canopy Growth Corp. dropped 6.6 per cent and 4.4 per cent, respectively.
The Canadian dollar weakened against its U.S. counterpart on Wednesday, pulling back from an 11-day high the day before as domestic data showed lower factory shipments and the greenback broadly rose ahead of the release of Federal Reserve minutes.
Canadian factory sales fell by 0.4 per cent in August from July on lower motor vehicle sales as a result of atypical assembly plant shutdowns, Statistics Canada said. Analysts had forecast a decrease of 0.6 per cent.
The U.S. dollar rose to a one-week high against a basket of major currencies. Minutes of the Fed’s September meeting, due for release later on Wednesday, could help guide expectations for the number of additional interest rate hikes to expect from the central bank over the coming months.
The Bank of Canada has also been hiking interest rates. Economists expect the central bank to hike next week for the fifth time since July 2017, a Reuters poll showed.
They say that the country’s economy will continue to grow faster than its potential over the coming quarters as U.S. fiscal stimulus boosts demand for its exports.
The Canadian dollar was trading 0.4 per cent lower at 1.2986 to the greenback, or 77.01 U.S. cents.
The currency, which touched on Tuesday its strongest level since Oct. 5 at $1.2915, traded in a range of 1.2933 to 1.2989.
U.S. stocks opened slightly lower on Wednesday, a day after Wall Street’s strongest rally in seven months, as investors were disappointed with IBM’s results and remained cautious ahead of the minutes of Federal Reserve’s latest meeting.
The Dow Jones Industrial Average fell 92.55 points, or 0.36 per cent, at the open to 25,705.87.
The S&P 500 opened higher by 1.75 points, or 0.06 per cent, at 2,811.67. The Nasdaq Composite gained 23.77 points, or 0.31 per cent, to 7,669.26 at the opening bell.
Shares of IBM dropped 7.3 per cent in early trading after the company’s quarterly revenue fell more than expected, pointing to a bumpy recovery for the member of the Dow Jones Industrial Average.
IBM’s results follow strong reports from other Dow members such as Goldman Sachs, UnitedHealth and Johnson & Johnson, which helped U.S. stocks jump more than 2 percent on Tuesday to claw back some losses from the recent selloff.
The selloff last week was mainly driven by worries over how corporate profit would be affected by tariffs, growing wages, rising interest rates and an increasingly hawkish Fed, which President Donald Trump called “my biggest threat.”
The minutes of the Fed’s September policy meeting, at which it raised rates for the third time this year, is due at 2:00 p.m. ET. Since the meeting, a string of strong economic data has prompted Fed policymakers to say they expect to continue a rate-hike cycle that began in late 2015.
“The (stock) indices are pulling back after yesterday’s blockbuster earnings rally that is likely to be challenged by the Fed’s FOMC minutes,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
However, Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, said the content of the Fed minutes is already known.
“Every now and then there might be a comment or an anecdote which we didn’t know about and the market might have made a quick reaction to it but generally it is a short lived move.”
Netflix shares jumped about 6 per cent at the opening of trading after the company reported a big increase in subscribers.
Oil prices fell on Wednesday after three days of gains as markets awaited key U.S. inventory data expected to show a build in U.S. crude stockpiles.
Brent crude was down 65 cents at $80.76 a barrel,, after gaining $1.15 over the previous three sessions. The benchmark, which hit a two-week low last week as equity markets dropped, is trading around $5 below a four-year high of $86.74 reached on Oct. 3.
U.S. light crude oil was 80 cents lower at $71.12.
Official oil inventory data from the U.S. Energy Department’s Energy Information Administration was due to be published on Wednesday.
A Reuters survey of eight analysts estimated crude stocks rose by about 2.2 million barrels last week.
On Tuesday, the American Petroleum Institute reported that U.S. crude inventories fell by 2.1 million barrels in the week to Oct. 12 to 408.5 million, surprising the market.
“Oil prices are retreating from the early morning strength as bulls are taking profit ahead of the EIA stats,” said Tamas Varga, an analyst at London brokerage PVM Oil.
“It is quite probable that higher numbers will be the order of the afternoon should U.S. commercial oil inventories fall.”
Reuters