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Premarket: TSX eyes higher open as commodities climb

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Canada’s stock index futures rose on Friday, lifted by surging commodity prices, as investors cautiously track big bank earnings in the U.S., which will kick off the corporate earnings season.

June futures on the S&P/TSX index were up 0.4% at 6:40 a.m. ET.

Gold prices hit a record peak as geopolitical risks and economic concerns surrounding China attracted robust demand, while copper prices continued their upward march.

Energy shares could see a rebound as heightened tensions in the Middle East raised the risk of supply disruptions and boosted oil prices.

The Toronto Stock Exchange’s S&P/TSX composite index closed 0.4% lower on Thursday, after touching its lowest intraday level since March-end.

The index is set to log a weekly decline as a hot inflation reading in the U.S. dampened hopes of a June rate cut, and the Bank of Canada held its rates steady on Wednesday.

Investors will monitor the crucial consumer prices index (CPI) reading in Canada next week, after BoC Governor Tiff Macklem hinted the central bank was open to a June cut if the recent cooling trend in inflation was sustained.

Across the border, another season of corporate earnings commenced in the U.S., with JPMorgan Chase & Co reporting a higher first-quarter profit, while Wells Fargo & Co’s profit fell more than 7%.

In Canadian corporate news, Brookfield Asset Management is in advanced talks to acquire a majority stake in private credit manager Castlelake with an investment of more than $1.5 billion, the Financial Times reported on Thursday.

Wall Street veered into negative territory early Friday after several big banks issued mixed first-quarter earnings reports and trimmed guidance on the assumption that the Federal Reserve would cut interest rates.

Futures for the S&P 500 slipped less than 0.3% before the bell, while futures for the Dow Jones Industrial Average fell 0.2%.

JPMorgan Chase shares fell 2.5% after it reported a modest 6% rise in first-quarter profits. However, the bank gave a lower-than-expected forecast for its net interest income for the full year, largely reflecting the bank’s expectation that the Fed will cut interest rates later this year.

Wells Fargo shares bounced between small gains and losses after it beat Wall Street profit targets, according to analysts surveyed by FactSet, even as earnings declined from the same period a year ago. It was Wells’ first earnings report since the Biden administration eased some of the restrictions on the bank after a series of scandals. Its shares were down less than 1% an hour before markets opened.

Citigroup shares rose 1.2% after it beat Wall Street analysts’ profit targets.

With the most recent earnings season just getting started, the main question dominating Wall Street has been if and when the Federal Reserve will deliver the cuts to interest rates that traders are craving. After coming into the year forecasting at least six cuts to rates, traders have since drastically scaled back their expectations.

A string of hotter – than – expected reports on inflation and the economy has raised fears that last year’s progress on inflation has stalled. Many traders are now expecting just two cuts in 2024, with some discussing the possibility of zero.

In Europe at midday, London’s FTSE 100 climbed 1.5% after a report showed that the country’s gross domestic product increased by 0.1% in February.

Germany’s DAX advanced 0.9% after data showed the country’s inflation rate eased to 2.3% in March, the lowest level since June 2021.

The CAC 40 in Paris gained 0.8% to 8,105.14.

In Asian trading, the Nikkei 225 index closed 0.2% higher at 39,523.55, with the dollar standing at 153.28 Japanese yen, nearly matching the 34-year high of 153.32 yen that it reached on Wednesday.

Hong Kong’s Hang Seng index declined 2.2% to 16,721.69, and the Shanghai Composite index fell 0.5% to 3,019.47.

“The resilience of Asian equities is noteworthy, especially considering the stronger U.S. dollar and China’s ongoing deflationary challenges,” Stephen Innes, managing partner at SPI Asset Management, said in a commentary.

South Korea’s Kospi shed 0.9% to 2,681.82 after the Bank of Korea held its benchmark rate unchanged at 3.50%.

Australia’s S&P/ASX 200 lost 0.3% to 7,788.10.

In the bond market, the yield on the 10-year Treasury fell to 4.51% on Friday from 4.58% late Thursday.

Benchmark U.S. crude added $1.25 to $86.27 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, was $1.12 higher at $90.86 a barrel.

In currency trading, the dollar inched back to 153.11 Japanese yen, while the euro cost $1.0650, down from $1.0725.

On Thursday, a rally in the tech sector boosted markets. The S&P 500 rose 0.7% and the tech-heavy Nasdaq composite charged up by 1.7% to a record 16,442.20. The Dow Jones Industrial Average, which has less of an emphasis on tech, was the laggard. It slipped less than 0.1%.

Reuters and The Associated Press

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