The Toronto stock market appeared set to start off lower as traders looked ahead to U.S. earnings for reassurance that the American economy is gaining strength.
The Canadian dollar was up 0.12 of a cent to 93.96 cents US on Monday and could find even more lift from the release of Canada’s June employment data at the end of the week.
U.S. futures were down with the Dow Jones industrial futures losing 23 points to 16,953, the Nasdaq futures dropping 6.5 points to 3,909.3, while the S&P futures losing 3.25 points to 1,985.44.
Markets will be looking at corporate results with U.S. resource company Alcoa Inc. kicking off the second-quarter earnings season Tuesday. Alcoa is particularly anticipated because the company is viewed as an economic bellwether by virtue of the fact that its aluminum products are used in so many applications.
U.S. banking giant Wells Fargo posts results on Friday.
Also during the week, traders will look for hints as to the pace of future interest rate hikes from the release of the minutes Wednesday of the latest meeting of the U.S. Federal Reserve.
Meanwhile, the Canadian dollar is entering the second half of 2014 at almost the 94-cent US level, close to its highest point for the year so far and much to the discomfort of the country’s exporters.
Those elevated levels could be tested Friday when Statistics Canada releases June employment data. The agency is expected to report that about 24,000 jobs were created last month compared with 25,800 in May, with the jobless rate remaining unchanged at seven per cent.
Analysts have observed that the dollar’s rise from 89 cents US earlier in the year is due to a number of reasons, including rising inflation, data suggesting the outlook for exporters is improving, a better American economic climate and rising oil prices.
But on Monday, oil fell below $104 per barrel as expectations of increased supply offset strong U.S. job growth. Oil has been sliding since it reached a 10-month closing high of $107.26 on June 20 due to concern about an advance by Islamic militants in controlling Iraqi territory. Since then, it has become clear that there are no imminent disruptions to supplies from Iraq, OPEC’s second-biggest producer.
Global stock markets were mostly lower Monday as investors looked ahead to U.S. corporate earnings following last week’s strong American job numbers.
On the commodity markets, August bullion was down $5.80 to US$1,314.8 an ounce.
The August crude contract was down 17 cents to US$103.89 a barrel, while August copper US$3.25 a pound, down 2.6 cents.