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At the open: TSX slips with oil prices

At the open: TSX slips with oil prices
Business
Wall Street was slightly lower at the open on Thursday as results of major banks JPMorgan and Citigroup failed to fuel the optimism that has driven indexes to record highs.

The Dow Jones Industrial Average fell 29.34 points, or 0.13 per cent, to 22,843.55. The S&P 500 lost 3.31 points, or 0.12 per cent, to 2,551.93. The Nasdaq Composite dropped 9.09 points, or 0.14 per cent, to 6,594.46.

JPMorgan and Citigroup, which had already talked down expectations earlier this month, reported earnings that were better than Wall Street estimates.

Both reported steep declines in trading revenue but Citi s came in smaller than expected.

JPMorgan s shares were flat in early trading and Citi was up 0.1 per cent.

"What we re seeing is after a long stretch of consecutive highs in the market, with earnings, even if they are slightly disappointing, or an even an aspect of earnings like bond trading at JPM, is more an excuse to selloff," said Scott Clemons, chief investment strategist for Brown Brothers Harriman in New York.

The U.S. dollar recovered on Thursday, having hit its lowest in more than two weeks as U.S. central bankers showed they were taking a more guarded view of inflation, helped by a steep fall in the British pound.

Asian stocks climbed to their highest in a decade, powering global shares to another record high and keeping them on course for their longest winning streak ever.

The dollar s dip came after minutes of the Federal Reserve s September meeting on Wednesday showed policymakers had a prolonged debate about whether inflation would pick up and the path of future interest rate rises if it did not.

But it slowly regained ground on Thursday and the pound tumbled after the European Union s chief negotiator said talks over Britain s exit from the EU were at an impasse.

"The minutes highlighted Fed officials are growing concerned low inflation might reflect more than transitory factors," RBC s global macro strategist Peter Schaffrik said.

European government bond yields fell in step with their U.S. peers. Italian yields led the trend, falling to near a three-week low after the government won support for electoral change likely to penalise the anti-establishment 5-Star Movement .

U.S. and German 10-year yields fell 1 basis points to 2.33 per cent and 0.45 per cent, respectively. Italian yields were down 3 basis points at 2.14 per cent.

The eye-catching move in stock markets came in Asia, with MSCI s broadest index of Asia-Pacific shares outside Japan reaching their highest since December 2007, up 0.7 per cent on the day.

Japan s Nikkei was up 0.4 per cent after brushing 20,994.40, its highest since November 1996. South Korea s KOSPI added 0.55 percent to reach a record high. Hong Kong s Hang Seng scaled a decade-high.

MSCI s broadest index of world stocks also reached record highs, as it has for six of the past eight trading days . It is on course for its 12th month of gains in October, its best run ever.

"Fundamentally, the global economy is in decent shape. Corporate sentiment is also sound as evidenced by strong data like the Chinese PMI, U.S. ISM and Japanese tankan," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

European stocks were less bouyant, with financial shares the biggest burden. Just Eat was the top performer after its merger with Hungryhouse got provisional clearance.

In currencies, sterling was down 0.7 per cent to $1.3135 after Michel Barnier said talks between the EU and Britain have not made major progress this week and are stuck over how much Britain should pay when it leaves.

The euro rose to its highest since Sept. 25 in early trades and was on course for a fifth day of gains.

Political developments in Italy and easing tensions in Spain after Catalonia stopped short of declaring independence have supported the common currency in recent days.

The yen was up 0.2 per cent against the dollar and the euro after a media survey showed that Japanese Prime Minister Shinzo Abe s ruling party may come close to keeping its two-thirds "super" majority in an Oct. 22 lower house election .

The Mexican peso was up at 18.735 pesos per dollar. That added to gains of 0.7 percent overnight as it rose from a five-month low, although the currency may come under renewed pressure if North American Free Trade Agreement (NAFTA) talks run aground.

Bitcoin smashed through the $5,000 barrier for the first time ever, jumping as much as 8 percent on the day.

In commodities, oil prices fell as U.S. fuel inventories rose despite efforts by OPEC to cut production.

Brent crude oil was down 60 cents at $56.34 a barrel. U.S. light crude was 75 cents lower at $50.55. Both benchmarks have risen more than 20 percent from their lows in June as world oil markets tightened.
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