Equities
Wall Street futures were negative early early Wednesday with traders looking ahead minutes from the latest Federal Reserve meeting and earnings from chipmaker Nvidia later in the day. Major European markets were mixed. TSX futures were weaker.
In the early premarket period, Dow, S&P and Nasdaq futures were all under pressure. On Tuesday, all three posted a second consecutive session of losses, with the Nasdaq falling 0.92 per cent. Canada’s S&P/TSX Composite Index closed down 0.18 per cent.
On Wednesday, markets will get the minutes from the Fed’s January policy meeting. Markets will be watching for hints about the timing of potential rate cuts later in the year.
“The mixed data since the last meeting though makes the FOMC minutes – released on Wednesday – all the more interesting,” OANDA senior analyst Craig Erlam said.
“March appears unlikely for the first cut but the minutes could tell us how close policymakers think they are.”
After the close of trading, Wall Street gets results from Nvidia, which saw its shares slump about 4 per cent on Tuesday as concerns about the company’s valuations weigh. Shares, which have skyrocketed over the past year, were down more than 1 per cent in premarket trading on Wednesday.
“Nvidia hasn’t said anything yet, and the market is already making big swings – to give you an idea on the potential of a positive or a negative move when the results finally arrive,” Swissquote senior analyst Ipek Ozkardeskaya said.
“Yesterday, Nvidia tumbled nearly 6 per cent out of the blue, and closed the session more than 4 per cent down, as some investors – who were obviously long Nvidia - preferred to take their profits in their pockets and move to the sidelines to avoid taking the risk of a major move that could spoil their profits – if the move happens toward the wrong direction.”
She said Nvidia is expected to announce sales revenue around US$20-billion in the fourth quarter and earnings per share of US$4.60.
“The numbers are huge if you think that sales were worth around US$6-billion, and EPS was just 88 US cents a year ago.,” she said.
In Canada, markets got results this morning from apparel maker Gildan Activewear before the start of trading. Gildan has been in the headlines recently amid a shareholder row over the board’s decision to oust founder Glenn Chamandy as the company’s chief executive officer. Gildan raised its quarterly dividend 10 per cent as it reported a fourth-quarter profit of US$153.3-million, up from US$83.9-million a year earlier, The Canadian Press reported. The clothing maker says it will pay a quarterly dividend of 20.5 US cents per share, up from 18.6 US cents per share.
After the close of trading, Canadian investors will get results from Suncor and Nutrien.
Overseas, the pan-European STOXX 600 was down 0.16 per cent in morning trading. Britain’s FTSE 100 slid 0.79 per cent. Germany’s DAX rose 0.26 per cent. France’s CAC 40 was also up 0.26 per cent.
In Asia, Japan’s Nikkei lost 0.26 per cent. Hong Kong’s Hang Seng rose 1.57 per cent.
Commodities
Crude prices were choppy in early trading with global economic uncertainty continuing to influence sentiment as markets await the first of two weekly U.S. inventory reports later in the session.
The day range on Brent was US$81.66 to US$82.73 in the early premarket period. The range on West Texas Intermediate was US$76.32 to US$77.38. Both benchmarks fell more than 1 per cent on Tuesday, pulling back from recent three-week highs.
“The oil market experienced a modest selloff at the beginning of the holiday-shortened week as traders sifted through conflicting demand signals from major global economies,” Stephen Innes, managing partner with SPI Asset Management, said.
Later Wednesday, markets will get weekly inventory figures from the American Petroleum Institute. More official numbers follow Thursday morning from the U.S. Energy Information Administration. The numbers are delayed by a day this week because of Monday’s market holiday.
Analysts polled by Reuters are forecasting that U.S. crude stocks rose by 4.3 million barrels for the week to Feb. 16.
In other commodities, spot gold rose 0.4 per cent at US$2,030.7 an ounce, its best level since Feb. 9. U.S. gold futures were up 0.1 per cent to US$2,041.3 per ounce.
Currencies
The Canadian dollar was little changed while its U.S. counterpart was mostly treading water ahead of the afternoon release of the minutes from the Fed’s most recent meeting.
The day range on the loonie was 73.87 US cents to 74.05 US cents in the early premarket period.
The U.S. dollar index, which weighs the greenback against a basket of currencies, was up 0.07 per cent at 104.15.
Britain’s pound slid 0.06 per cent to US$1.2615. The euro fell 0.06 per cent to US$1.0802.
In bonds, the yield on the U.S. 10-year note was lower at 4.267 per cent ahead of the North American opening bell.
More company news
HSBC Holdings on Wednesday reported a US$3-billion charge on its stake in a Chinese bank amid mounting bad loans in the world’s second-largest economy, taking the shine off a record annual profit. Shares in the British lender slid as much as 7% in early London trade against a broadly flat FTSE index, heading for their worst single-day drop since the COVID-19 pandemic erupted in March 2020 as investors also noted higher costs. The share price plunge came despite the bank announcing a new US$2-billion buyback, an annual dividend of US$0.61 per share and the intention to pay a special dividend of US$0.21 per share once it completes the sale of its Canada business. -Reuters
Amazon.com Inc. is being added to the Dow Jones Industrial Average, joining Apple, Walt Disney, Walmart and other companies that make up the 30-stock average. The e-commerce giant will replace drugstore operator Walgreens Boots Alliance in the Dow before the open of trading on Monday, S&P Dow Jones Indices said Tuesday. -The Associated Press
Economic news
(2 p.m. ET) Minutes from U.S. Fed’s Jan. 30-31 meeting are released.
With Reuters and The Canadian Press
