Equities
Global markets were mixed as unease over AI’s enormous funding needs weighed confidence ahead of a week packed with earnings.
Wall Street futures were in positive territory after major U.S. markets closed sharply lower on Friday.
TSX futures pointed lower as investors eyed September inflation numbers out later this morning.
On Wall Street, markets are watching earnings from Cleveland-Cliffs Inc., Fifth Third Bancorp, Steel Dynamics, Inc. and W.R. Berkley Corp.
“Investors have long worried that AI revenues won’t be sufficient to recoup the massive upfront investment, while AI infrastructure may need to be written down as it ages and depreciates in the meantime, which lowers book value massively,” said My Bui, an economist at fund manager AMP.
“Rising government bond yields and wider corporate credit spreads are increasing financing costs, making it harder to borrow, refinance, and keep the AI infrastructure build-out going.”
Overseas, the pan-European STOXX 600 was down 0.82 per cent in morning trading. Britain’s FTSE 100 fell 0.98 per cent, Germany’s DAX declined 1.14 per cent and France’s CAC 40 dropped 1.43 per cent.
In Asia, Japan’s Nikkei closed 0.62 per cent lower, while Hong Kong’s Hang Seng climbed 0.52 per cent.
Commodities
Oil prices slipped from a five-month high as investors took profits after U.S. President Donald Trump waived sanctions and tariffs on Russia that may lead to more Russian fuel exports.
Brent crude futures fell 1.17 per cent to US$108.60 a barrel after settling at its highest since May 19 on Friday. U.S. West Texas Intermediate crude (WTI) traded at US$101.40 a barrel, down 0.04 per cent.
“Trump’s move looks like another desperate attempt to keep oil prices in check ahead of the US midterm elections,” said Priyanka Sachdeva, head of market insight at Phillip Nova, adding that it does little to address the physical supply disruptions in the Strait of Hormuz, where oil tanker attacks continue.
In other commodities, spot gold rose 0.2 per cent to US$4,171.65 an ounce , while U.S. gold futures for December delivery gained 0.26 per cent to US$4,191.90.
Currencies and bonds
The Canadian dollar strengthened against its U.S. counterpart.
The day range on the loonie was 70.53 US cents to 70.99 US cents in early trading. The Canadian dollar was down about 0.38 per cent against the greenback over the past month. It traded at $1.4089 per US$1.
The U.S. dollar index, which weighs the greenback against a group of currencies, advanced 0.1 per cent to 101.94.
The euro declined 0.28 per cent to US$1.1210. The British pound slipped 0.02 per cent to US$1.3326.
In bonds, the yield on the U.S. 10-year note was little changed at 5.085 per cent.
Economic news
China releases third quarter GDP: Economic growth bounced off three-year lows as roaring exports offset consumers’ tight grip on their wallets. The 4.5-per-cent pace beat consensus forecasts and analysts expect Beijing to reach its 2026 target of 4.5-5.0 per cent without resorting to additional stimulus.
8:30 a.m. ET: Canada consumer price index for September. Consensus is for a monthly rise of 0.2 per cent, or 3.2 per cent year over year, accelerating from August’s 3.0 per cent.
10 a.m. ET: U.S. NAHB housing market index
11:30 a.m. ET: Bank of Canada business outlook survey and survey of consumer expectations
Alberta referendum vote
With Reuters and The Canadian Press