Investing.com - Canada’s main stock exchange was trading down on Friday, retreating from fresh all-time peak due to a wave of upbeat domestic bank earnings.
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The S&P/TSX composite index shed 145 points or 0.46% at 31,329.94
On Thursday index was up by 1% to 31,477.57, surpassing a prior record notched late last week.
TD Bank, CIBC, and Bank of Montreal all delivered better-than-anticipated estimates for fourth-quarter earnings, underpinned by strength at their capital markets divisions which stemmed from improved dealmaking and trading revenues. Shares of CIBC and TD, in particular, jumped new record highs.
Reports from Royal Bank of Canada, National Bank of Canada, and Scotiabank -- the last of Canada’s six major lenders -- were similarly solid earlier in the week.
Investors are now keeping tabs on impending Canadian employment numbers for November, as well as a trove of data releases in the United States.
U.S. stocks up
U.S. stocks were slightly higher, but have been trading in tight ranges, with investors awaiting a key inflation report for confirmation that the Federal Reserve will cut interest rates next week.
At 10:15 ET (15:15 GMT), the Dow Jones Industrial Average gained 235 points, or 0.5%, the S&P 500 index gained 35 points, or 0.5%, and the NASDAQ Composite rose 160 points, or 0.7%.
The main averages closed in a mixed fashion in the prior session, with the benchmark S&P 500 and tech-heavy NASDAQ Composite both advancing, while the blue-chip Dow Jones Industrial Average lagged.
All three indices have managed to eke out small gains so far this week.
PCE inflation gauge in spotlight
Expectations of 25-basis point reduction at the Fed’s December 9–10 meeting are running hot -- with futures now pricing in roughly an 87% probability -- on the back of recent weak labor data and broader signs of economic cooling.
Thursday’s weekly jobless claims plunged by 27,000 to a seasonally adjusted 191,000, the lowest level since September 2022, but economists cautioned that distortions tied to the Thanksgiving holiday may have exaggerated the decline.
Elsewhere, a private-sector payroll report from ADP on Wednesday showed a decline of 32,000 jobs -- the largest drop in over two and a half years, and a report by Challenger, Gray & Christmas stated that announced job cuts dropped sharply in November but hiring intentions remained weak.
While the importance of price stability, the second element of the Fed’s dual mandate, has faded a little of late, all eyes are now on the release of the delayed monthly core inflation gauge, the Personal Consumption Expenditures Price Index (PCE), later in the session.
This is widely seen as the Fed’s preferred inflation measure, and a soft PCE print could further embolden rate-cut expectations.
Excluding food and energy, the underlying, or "core," PCE price index is seen holding at 2.9% in the 12 months to September and 0.2% month-on-month.
Beyond PCE, the economic calendar will feature the latest survey of consumer sentiment from the University of Michigan.
Netflix linked with Warner Bros Discovery’s film assets
In the corporate sector, Netflix has entered into exclusive negotiations to purchase Warner Bros Discovery’s film and television studios as well as its prized streaming assets, media reports have said.
The streaming giant reportedly offered $28 per share for those portions of the long-time Hollywood stalwart, whose brands include HBO and DC Comics.
Should the transaction be finalized, it would transform Netflix into a media powerhouse with control over one of the most valuable content libraries in the entertainment industry.
Netflix and Warner Bros are anticipated to announce a deal imminently, the Wall Street Journal reported, citing people familiar with the matter.
Elsewhere, Ulta Beauty shares soared premarket after the cosmetics retailer topped Wall Street estimates for its fiscal third quarter and raised its full-year outlook.
HPE stock slumped after the cloud services and hardware company missed analysts’ revenue expectations for the fourth quarter, posting $9.68 billion versus a consensus estimate of $9.94 billion.
Crude steadies; WTI on track for weekly gain
Oil prices steadied Friday, maintaining the previous session’s gains as stalled diplomatic progress over the Ukraine war and firm expectations of a Fed rate cut supported sentiment.
Brent futures last slipped marginally by 0.1% to $63.23 a barrel, and U.S. West Texas Intermediate crude futures inched down 0.1% to $59.60 a barrel.
Both contracts jumped nearly 1% on Thursday, and while Brent was mostly unchanged this week, WTI was on track for a 1.5% weekly gain -- a second straight week of increase.
The lack of progress in U.S.-Russia talks to end the Ukraine war has dampened hopes that energy sanctions on Russian crude could be eased soon, keeping a risk premium in the market.
Gold climbs
Gold prices rose modestly, aided by a softer dollar and firm wagers that the Fed will cut interest rates next week.
Spot gold was up 0.3% at $4,222.85 an ounce by 06:49 ET. U.S. Gold Futures for February delivery rose 0.2% to $4,252.35 an ounce.
The U.S. dollar index, which tracks the greenback against a basket of currencies, stood near a five-week low, having dipped as markets priced in Fed cut in December and expectations of additional easing early next year.
A weak dollar can boost demand for bullion, as it makes gold cheaper for overseas buyers.
