Markets Gain Momentum in Mid-Week Session

Corvus, Anaergia in Focus

Canada's main stock index opened higher on Wednesday, led by material and energy stocks, as eyes were trained on the central bank, expected to announce a further tapering of its asset purchases.

TSX Composite index picked up 27.16 points to open Wednesday at 20,297.81

The Canadian dollar gained 0.07 cents to 79.92 cents U.S.

South Africa's AngloGold Ashanti Ltd said it had offered to buy all the shares it does not already own in Canadian bullion miner Corvus Gold as it seeks to expand its ore reserves.

Canaccord Genuity raised the rating on Corvus to buy from hold. Shares were unchanged at $3.98.

Scotiabank initiated coverage on Anaergia Inc with an outperform rating. Anaergia gained 36 cents, or 2.6%, to $14.37.

Canaccord Genuity initiated coverage on Nextpoint Financial with a buy rating. Nextpoint shares collapsed 82 cents, or 8.6%, to $9.99.

CIBC cut the rating on Precision Drilling to neutral from outperform. Precision shares dived $3.02, or 5.9%, to $48.47.

Wednesday, the Bank of Canada announced it is cutting its expectations for economic growth this year as it keeps its key interest rate target on hold at 0.25%.

The central bank says it expects the economy to grow 6% in 2021, down from its previous forecast of 6.5%.

Elsewhere on the economic front, Statistics Canada reported manufacturing sales declined 0.6% in May, on lower sales in 11 of 21 industries led by the machinery, chemical and fabricated metal product industries.

ON BAYSTREET

The TSX Venture Exchange stepped forward 2.96 points to 944.58.

Seven of the 12 TSX subgroups gained ground mid-morning, with gold soaring 0.7%, while materials and information technology each sprang up 0.5%.

The five laggards were weighed most by utilities, down 0.4%, consumer staples down 0.2%, and consumer discretionary stocks fading 0.1%.

ON WALLSTREET

The S&P 500 rose to a new intraday record Wednesday after Federal Reserve Chairman Jerome Powell said in prepared remarks that the central bank is not close to altering its easy monetary policies.

The Dow Jones Industrials leaped 118.44 points to 35,007.23

The S&P 500 acquired 15.92 points to 4,385.13.

The NASDAQ jumped 74.8 points to 14,752.45. Apple and Google-parent Alphabet shares both hit all-time highs.

Bank of America shares fell after it reported second-quarter revenue of $21.6 billion, just under the $21.8 billion estimate from Refinitiv. Low interest rates knocked net interest income by 6%, the bank said.

BlackRock, the largest asset manager in the world, reported earnings and revenue that topped expectations on Wednesday morning. Shares of BlackRock dropped after the bell.

Shares of Citigroup and Wells Fargo each edged higher after both companies posted better-than-expected second-quarter earnings results.
Delta Air Lines shares ticked higher after the company reported its first quarterly profit of $652 million since 2019, boosted by federal aid.

The airline also said domestic leisure demand has fully recovered and corporate travel increased in the quarter.

In total, 23 S&P 500 companies will post quarterly results this week and second-quarter results are supposed to show a sizable comeback from the depths of the pandemic. Profit growth is expected to total 64% year-over-year for the quarter, according to analyst estimates collected by FactSet.

American Airlines shares jumped after the carrier forecast better revenue and a narrower loss than its previous estimate for the second quarter. The company is set to report quarterly fiscal results on July 22.

UBS raised its December 2021 S&P 500 target to 4,500 on Tuesday, up from a prior forecast of 4,400. The call hinges on strong numbers from second-quarter earnings.

The S&P 500 is up more than 16% this year and more than 36% in the past 12 months.

Meanwhile, Apple shares jumped to a record high on Wednesday. JPMorgan added the tech giant to its focus list and increased its estimates for iPhone 12 production. The firm also raised its price target for Apple and believes the stock can gain 20% in the next 12 months.

The hot inflation report overshadowed strong second-quarter earnings reports. JPMorgan and Goldman Sachs kicked off earnings season on Tuesday, with both banks beating top and bottom line estimates. PepsiCo also topped estimates.

For his part, Powell will say in his required semi-annual testimony before Congress on Wednesday that the central bank can wait before it starts to ease its bond purchases despite surging inflation readings, according to remarks released before his testimony. In his prepared statement, Powell said he still expects inflation to moderate.

The central bank chief is set to speak before the House Committee on Financial Services at noon ET. He is scheduled to testify before the Senate on Thursday.

Prices for 10-Year Treasurys sagged, raising yields to 1.37% from Tueday’s 1.35%. Treasury prices and yields move in opposite directions.

Oil prices dropped 49 cents to $74.76 U.S. a barrel.

Gold prices brightened $12.50 to $1,822.40 U.S. an ounce.