Futures Flat to Begin Week

Investors Look Ahead to BoC Decision

Futures for stocks in Canada’s largest centre were subdued on Monday after registering their second straight week of gains, with investors cautious ahead of Bank of Canada's (BoC) monetary policy meeting later in the week.

The TSX Composite ended Friday down 39.79 points to close Friday at 20,485.66.

December futures on the S&P/TSX index were flat.

The Canadian dollar eked higher 0.20 cents to 74.56 cents U.S.

Arizona Metals and Evertz Technology are among the firms in Canada reporting earnings Monday.

The BoC will decide on interest rates on Wednesday, with traders pricing in a 73.6% chance of a dialed-down 25-bps hike to 4%, after the central bank had surprised markets with a 50-bps increase last month.

The aggressive rise in borrowing costs had triggered concerns about an economic slowdown, with the commodity-heavy TSX index down 3.5% year-to-date and bond markets showing deep yield curve inversions - a harbinger for recession.

The BoC has forecast that growth would stall from the fourth quarter of this year through the middle of 2023.

On the economic slate, Statistics Canada said building permits Canada declined 1.4% in October to $10.0 billion. Losses in the residential sector more than offset gains from the non-residential sector.

ON BAYSTREET

The TSX Venture Exchange inched up 0.02 points Friday to 599.2, for a gain on the week of 18.44 points, or 3.2%.

ON WALLSTREET

U.S. stock futures fell Monday as investors awaited more economic data ahead of the Federal Reserve’s December policy meeting later this month.

Futures for the Dow Jones Industrials dumped 157 points, or 0.5%, Monday to 34,302.

Futures for the S&P 500 slumped 20.75 points, or 0.5%, to 4,054.75.

Futures for the NASDAQ Composite retreated 50.75 points, or 0.4%, to 11,959.50.

Wall Street is coming off its second positive week in a row, with the S&P 500 moving forward 1.1%, and NASDAQ advancing 2.1%. The Dow advanced 0.2% last week.

Those moves came after Fed Chair Jerome Powell signaled that smaller interest rate hikes could start in December. The Fed is slated to meet Dec. 13-14 and is expected to raise rates by 50 basis points, or 0.5 percentage points. On Friday, stronger-than-expected jobs report initially rattled markets, but traders later shook it off.

Starbucks shares fell after Deutsche Bank downgraded the coffee giant, saying further gains will be harder to come by.

Shares in Silvergate Capital dipped after Morgan Stanley downgraded the company, saying a “high level of uncertainty” remains around the stock following the FTX collapse.

On the economic front, investors are expecting the November ISM services data at 10 a.m. ET on Monday. Economists polled by the Dow Jones are expecting a reading of 53.7.

In Japan, the Nikkei 225 nosed ahead 0.2% Monday, while in Hong Kong, the Hang Seng Index popped 4.5%.

Oil prices jumped $2.21 to $82.19 U.S. a barrel.

Gold prices picked up 30 cents to $1,809.90 U.S. an ounce.