Before the Bell: TSX, Wall Street futures fade as earnings dominate, Fed awaited

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Wall Street futures were stable Tuesday, with gains in focus ahead of tomorrow’s Federal Reserve interest rate decision. Major European markets fell. TSX Futures are also largely unchanged as traders consider the latest indicators of the health of Canada’s broader economy.

Earlier in the premarket period, futures linked to major US indices were in the red, but found footing as the North American open approached. All three ended weak on Monday, but are headed for a solid rally heading into the month. The S&P 500 is up over 4% for him so far in the month and the Nasdaq is up over 8% for him.of S&P/TSX Composite Index It closed 0.7% lower on Monday.

Ed Moya, senior analyst at OANDA, said: “January’s rally hit a wall and could probably recover until it surpassed Wednesday’s Fed press conference and Apple’s results after Thursday’s close. It has no sex.

On Tuesday, the US market will receive quarterly results from McDonald’s, General Motors, Caterpillar and Pfizer. Snap reports after the trade closes.

GM shares soar in pre-market trading After the car manufacturer has posted Adjusted earnings per share for the quarter was $2.12, beating analyst expectations of $1.69. Quarterly revenue of $43.11 billion exceeded market expectations.

In Canada, Imperial Oil reported this morning, while Canadian Pacific Railway announced results after the close of trading.

Calgary-based Imperial Oil reported higher fourth-quarter earnings, helped by higher prices and tighter supplies. Imperial reported net income of $1.7 billion ($2.86 per share) for the three months ended Dec. 31, up from $813 million ($1.18 per share) a year earlier. Did.

Economically, Canadian investors read Gross Domestic Product for November by Statistics Canada before the opening of trading. According to Statscan, economic growth for the quarter was 0.1%, in line with market expectations. Preliminary estimates from the agency also suggest that real gross domestic product grew at an annualized rate of 1.6% in the fourth quarter, beating the Bank of Canada’s forecast of 1.3%.

“This report is unlikely to cause the BoC to reconsider its recent moratorium,” said James Orlando, senior economist at TD. “The economy has not yet absorbed the impact of past rate hikes. We can see the beginning of this, but GDP and employment growth are set to stall in the coming months, and there will be more to come.”

Overseas, the pan-European STOXX 600 fell 0.68% by noon. The UK FTSE 100 fell 0.73%. Germany’s DAX and France’s CAC 40 were down 0.46% and 0.37%, respectively. New figures released on Tuesday showed eurozone GDP expanded by 0.1% in the fourth quarter. The market had expected a contraction of 0.1%.

In Asia, Japan’s Nikkei Stock Average fell 0.39%. Hong Kong’s Hang Seng fell 1.03%.

merchandise

Oil prices fell as markets remained cautious ahead of Wednesday’s Federal Reserve interest rate decision and traders weighed an oil spill from Russia.

Brent dates ranged from $85.73 to $85.25 during the early premarket period. The West Texas Intermediate ranged him from $76.63 to $78.14.

“Even though Asia’s appetite for all kinds of oil continues, oil prices remain low,” Stephen Innes, managing partner at SPI Asset Management, said in a report.

“The problem for oil bulls is that their thirst is being satisfied with cheap Russian barrels.”

Reuters reports that oil loadings from Russia’s Ust-Luga port are expected to rise in early February despite Western sanctions imposed over its invasion of Ukraine.

Similarly, traders remain wary of the midweek policy announcement by the Federal Reserve and interest rate decision by the European Central Bank on Thursday. Concerns remain that rising interest rates will constrain economic growth and weigh on global demand.

However, the International Monetary Fund (IMF) said that “surprisingly resilient” demand in the United States and Europe, easing energy costs, and the reopening of the Chinese economy after Beijing abandoned its strict COVID-19 restrictions could lead to 2023. slightly raised its global growth outlook. Restrictions, according to Reuters.

Gold prices hit a one-week low as the US dollar solidified ahead of tomorrow’s Federal Reserve decision.

Spot gold fell 0.8% to US$1,906.51 per ounce by early Tuesday morning, its lowest level since 19th January.

US gold futures fell 0.9% to $1,922.00.

“Gold’s main kryptonite is when the Fed can’t control inflation and needs to tighten much more than the market is expecting,” said OANDA’s Ed Moya.

“Gold could enter the ‘danger zone’ if we get higher-than-expected inflation reports and solid inflation reports.” [U.S. non-farm payrolls] Reports suggest wage pressures will continue for some time.”

currency

The Canadian dollar fell and the US currency group rose against the currency group, but still expected to fall for the fourth consecutive month.

Looney’s day range was 74.30 cents to 74.76 cents in the early hours.

Both risk aversion and a stronger dollar are strong, said Sean Osborne, chief currency strategist at Scotiabank. Even if it is caused by a social factor,” he said. I’m weighing Rooney this morning.

In global markets, the US dollar index, which weighs currencies against a group of peers, rose 0.31% at 102.56 early Tuesday morning.

However, the index has fallen almost 1% over the month. The January drop marks his fourth straight month of decline.

Elsewhere, the euro fell in early trading in Europe, ending 0.41% lower at $1.081, according to Reuters figures.

The British pound fell 0.29% to $1.231, but remained on track for its first gain in four months. The yen rose 0.1% to 130.34 yen to the dollar, its first gain in three months.

In bonds, the 10-year US Treasury yield is low at 3.531% before dawn.

See more company news

Caterpillar Inc. reported on Tuesday Quarterly earnings below expectations Rising manufacturing costs associated with materials and freight squeezed the margins of heavy equipment manufacturers. Adjusted earnings for the December-ending quarter rose to $3.86 from $2.69 in the year-ago quarter. On average, analysts expected earnings of $4.02 per share, according to Refinitiv IBES data. –Reuters

ExxonMobil invested $59 billion On 2022 adjusted earnings, the company said Tuesday, it earned more than $6.7 million an hour last year, setting not only a company record but a historic high for the Western oil industry. The oil major has broken annual records with soaring prices and soaring demand, totaling him expected to reach nearly $200 billion. The scale has sparked renewed criticism of the oil industry and calls for more countries to impose windfall profits taxes on companies. Exxon’s performance is well above his then-record net profit of $45.2 billion reported in 2008, when oil prices hit $142 a barrel, 30% above last year’s average. . Significant cost reductions during the pandemic helped boost earnings significantly last year. – Reuters

Volkswagen teeth looking at setup Ontario’s battery cell plant, Handelsblatt daily reported on Tuesday, adding that the state offered investment and other incentives. Citing documents, he said from this month that five entries have appeared in Volkswagen’s state lobby register, including one with the name of Oliver Blume, his chief executive. , the report said, citing documents. –Reuters

general motors company and Lithium Americas Corp announced Tuesday that they will jointly invest in the development of the Thacker Pass mine in Nevada. Under the agreement, GM will make his $650 million equity investment in Lithium Americas. – Reuters

Pfizer COVID-19 product sales of $21.5 billion in 2023 are projected to fall short of Wall Street expectations, hit by lower demand in international markets and slower uptake of booster vaccines. U.S. pharmaceutical companies see $13.5 billion in sales from vaccines in 2023, below Refinitiv’s estimate of $14.39 billion, and antiviral Paxlovid sales of $8 billion. , said it was below the $10.33 billion expected by Street. –Reuters

McDonald’s Co., Ltd. surpass Wall Street estimates Quarterly comparable sales on Tuesday were boosted by higher menu prices, higher restaurant traffic and growth in most major markets. According to Refinitiv’s IBES data, the burger chain’s global same-store sales increased by 12.6% in the fourth quarter ended Dec. 31. Sales in the UK, Germany and France increased despite concerns of a recession in Europe. – Reuters

economic news

(8:30 am ET) Canadian monthly real GDP for November.

(8:30 am ET) Fourth Quarter US Cost of Employment Index.

(9am ET) S&P CoreLogic Case-Shiller Home Price Index (20 cities) for November.

(9:00 a.m. ET) US FHFA Home Price Index.

(9:45 am ET) Chicago US PMI in January.

(10 a.m. ET) Consumer Confidence Sentiment from the US Congress Committee for January.

Also: The US Federal Agencies meeting begins.

With Reuters and Canadian Press