U.S. stocks fell Wednesday, with investors digesting more corporate earnings as well as disappointing growth data.
Canada’s main stock index opened lower on Wednesday as investors digested big bank earnings and await key economic data in both the United States and Canada, with Canada’s Q4 GDP data and U.S. PCE data due Thursday.
GDP data, PCE inflation in focus
Investors remain concerned about the possibility that the Federal Reserve will keep interest rates at elevated levels for a prolonged period of time, and thus the focus this week has been on a string of key economic readings that could dictate Fed thinking going forward.
Data released earlier Wednesday showed that the U.S. economy grew at a solid clip in the fourth quarter amid strong consumer spending, but it appears to have lost some speed early in the new year.
Gross domestic product increased at a 3.2% annualized rate last quarter, revised slightly down from the previously reported 3.3% pace, and a drop from 4.9% growth the prior quarter.
That said, the PCE price index, the Fed’s preferred inflation gauge, is the week’s most widely-waited release on Thursday, given that it is likely to factor into the central bank’s outlook on interest rates.
A string of Federal Reserve officials are also set to speak in the coming days after several officials reiterated that the bank was in no hurry to begin loosening monetary policy.
U.S. Stock Market News
Fourth-quarter earnings have continued to emerge, as the season draws to a close.
TJX Companies stock fell 0.2%, in volatile trading, after the retailer reported higher-than-anticipated sales growth in the fourth quarter, but offered up soft future guidance.
Salesforce heads the billing after the close with its quarterly numbers.
Elsewhere, Beyond Meat Inc surged over 55% after reporting better-than-expected quarterly earnings, and also forecasting stronger margins.
E-commerce site eBay rose 6% on stronger-than-expected earnings, while Ambarella (NASDAQ: AMBA) rose 8% on a smaller-than-expected loss.
On the other hand, online dating company Bumble lost 10% on weak revenue guidance, while Urban Outfitters slid 8% on disappointing earnings.
Toronto Stock Market News – Big Bank Earnings Continue
Royal Bank of Canada on Wednesday beat analysts’ estimates for quarterly profit as higher interest rates helped the bank earn more on its interest-bearing assets. Adjusted profit came in at C$4.07 billion, or C$2.85 per share above analysts’ estimates for C$2.80 per share. Net interest income rose 2.1% for the quarter. Total provisions for credit losses jumped to C$813 million up 53%, from a year ago.
National Bank of Canada reported a better-than-expected first-quarter profit. On an adjusted basis, RBC earned C$2.59 per share, beating analysts’ estimates of C$2.36. Net interest income slid 31.7% to C$751 million in the first quarter. Provisions for credit losses in the first quarter rose to C$120 million from C$86 million.
Crude falls on large U.S. inventories build
Oil prices edged higher Wednesday, as traders digested the weaker-than-expected U.S. GDP data as well as a hefty rise in U.S. crude inventories.
Data from the American Petroleum Institute, released on Tuesday, showed U.S. crude oil inventories grew by 8.4 million barrels in the week to Feb. 22, much more than analyst expectations for a build of 1.8 million barrels.
The official inventory data are due later in the day and have somewhat diverged from the API data in recent weeks.
Additionally, gold futures fell 0.1% to $2,042.60/oz, while EUR/USD traded 0.2% lower at 1.0825.
