TORONTO — Canada's main stock index eked out a small gain thanks to strength in battery metals, while U.S. markets were down even as the country's biggest banks beat earnings expectations.
All eyes were on some of the U.S.’ biggest banks Friday as they released their earnings for the first quarter of the year, said Angelo Kourkafas, an investment strategist at Edward Jones.
“The banks kicked off the earnings season,” he said. “It was better than expected.”
This lent some support to the market even as it contracted a little following Thursday’s rally, he said.
The S&P/TSX composite index was up 15.42 points at 20,579.91.
In New York, the Dow Jones industrial average was down 143.22 points at 33,886.47. The S&P 500 index was down 8.58 points at 4,137.64, while the Nasdaq composite was down 42.81 points at 12,123.47.
The bank earnings were encouraging, said Kourkafas.
“Today we had JP Morgan, Citibank, Wells Fargo and PNC, all beating expectations,” he said.
He noted that expectations for bank earnings had been lowered after the banking crisis.
Retail sales in the U.S. slowed in March, another sign of the economy softening under the pressure of high interest rates, while Canadian manufacturing sales were also slightly weaker.
Meanwhile, senior Federal Reserve official Christopher Waller said Friday that more interest rate hikes are needed to get inflation under control.
Consensus for a hike at the Fed’s June decision crept up after the comments, said Kourkafas.
Some of the rate cuts markets are pricing in Canada and the U.S. will need to be recalibrated, he said.
“We are seeing bond yields a bit higher as positive economic momentum likely means that the central bank's job is not done.”
Next week in Canada will see retail sales data and fresh inflation numbers, while in the U.S. the focus will be on more earnings, said Kourkafas.
Investors will be looking for companies’ guidance on the coming quarters more than anything, he said.
The Canadian dollar traded for 74.84 cents US compared with 74.86 cents US on Thursday.
The May crude contract was up 36 cents at US$82.52 per barrel and the May natural gas contract was up 11 cents at US$2.11 per mmBTU.
The June gold contract was down US$39.50 at US$2,015.80 an ounce and the May copper contract was down two cents at US$4.11 a pound.
This report by The Canadian Press was first published April 14, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press