20th Sep 2018 13:32
OTTAWA (Alliance News) - Higher futures and steady gold prices point to a slightly positive start for the Canadian stock market on Thursday.
Activity is likely to be mostly stock specific with corporate news providing some direction.
The market has been closely following the developments on the NAFTA front. Canada's Foreign Affairs Minister Chrystia Freeland and her US trade counterpart continue negotiate, aiming to find a compromise that would help finalise the NAFTA ahead of the October 1 deadline.
"Trade agreements do take some time, both to negotiate and to update, because the economy is complicated and trade agreements are complicated," said Freeland.
When asked about whether she could hear the clock ticking, she is reported to have said, "Canada's sole objective, the only target that we are aiming for, is getting a good deal for Canada, so that's what we're focused on.
The benchmark S&P/TSX Composite Index ended down 46.12 points, or 0.28%, at 16,149.92, the day's low. The index touched a high of 16,229.99 during the session.
In company news, Magna International Inc. (MG.TO) announced today that its powertrain unit has signed an agreement to sell its global Fluid Pressure & Controls business to South Korea-based Hanon Systems, for approximately USD1.23 billion.
IntelGenx Corp. (IGX.V.TO) announced that it has executed a non-binding letter of intent or LOI with Tilray, Inc. to enter into a world-wide agreement to produce cannabis-infused VersaFilm products.
Asian markets were subdued on Thursday with investors largely staying on the sidelines amid trade war worries. The Chinese market ended flat after Alibaba's founder and chairman Jack Ma said the e-commerce giant no longer plans to create one million jobs in the US, amid the ongoing trade conflict between the US and China.
European markets edged higher, extending recent gains, with investors shrugging off trade worries and looking ahead to next week's monetary policy meeting of the Federal Reserve for further direction.
In economic news, the Organization for Economic Cooperation & Development downgraded it global growth projections for both 2018 and 2019. According to Interim Economic Outlook, the global economy will grow 3.7% each this year and next. In May, the OECD had projected 3.8% expansion for 2018 and 3.9% for 2019.
The US will expand 2.9% in 2018 and 2.7% in 2019, the agency said. China's growth is seen at 6.7% this year and 6.4% in 2019.
The Paris-based think tank said escalating trade tensions, tightening financial conditions in emerging markets and political risks could further undermine strong and sustainable medium-term growth worldwide.
"Trade tensions are starting to bite, and are already having adverse effects on confidence and investment plans," OECD Chief Economist Laurence Boone, said.
"Trade growth has stalled, restrictions are having marked sectoral effects and the level of uncertainty on trade stances remains high."
In UK, retail sales grew unexpectedly in August, gaining 0.3% month-on-month, data from the Office for National Statistics revealed. However, it was slower than the 0.9% increase seen in July. Sales were expected to fall 0.2% in the month.
In the US, data on weekly jobless claims and the Philadelphia Fed manufacturing index for September are due at 8:30 AM ET.
Data on US existing home sales will be released at 10:00 AM ET.
In commodities, crude oil futures for October were down USD0.11, or 0.16%, at USD70.66 a barrel.
Natural gas futures for October were up USD0.014, or 0.48%, at USD2.922 per million btu.
Gold futures for December were gaining USD2.20, or 0.18%, at USD1,210.50 an ounce.
Silver futures for October were up USD0.050, or 0.35%, at USD14.330 an ounce, while Copper futures were declining marginally, at USD2.727 per pound.