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Equities

Canada’s main stock index was treading water early Friday as lingering concerns over the impact of the spread of the coronavirus tempered sentiment. U.S. indexes carved out modest gains as chipmakers’ shares rose on a positive forecast from Nvidia although soft retail sales numbers and virus worries capped the advance.

At 9:39 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down just 9.66 points, or 0.05 per cent, at 17,811.51.

On Wall Street, the Dow Jones Industrial Average rose 17.16 points, or 0.06 per cent, at the open to 29,440.47.

The S&P 500 opened higher by 4.14 points, or 0.12%, at 3,378.08. The Nasdaq Composite gained 16.94 points, or 0.17%, to 9,728.90 at the opening bell.

China’s National Health Commission said it had recorded 121 new deaths on the mainland on Feb. 13, taking the accumulated total infected to 63,851 people. However, markets appeared to be weighing the long-term economic impact of the outbreak and looking past the current crisis to again focus on U.S.-China trade.

“The health crisis in China continues to play on traders’ minds, but international trade is in focus too,” David Madden, analyst with CMC Markets U.K., said.

“The U.S. and China pledged to reduce levies on imports from each other, which should help smooth over the trading relationship between the two countries. The reduction in tariffs [is] due to take place today.”

Sentiment heading into the North American session was tempered by a tepid reading on U.S. retail sales. The U.S. Commerce Department said retail sales rose a modest 0.3 per cent in January. Core retail sales, which exclude automobiles, gasoline, building materials and food services, were flat.

On Bay Street, earnings continue to set the tone.

Canopy Growth shares jumped nearly 17 per cent in early trading in Toronto after the Ontario-based cannabis growth reported a lower-than-forecast loss in the latest quarter. Excluding items, Canopy posted a loss per share of 35 cents in the third quarter ended Dec. 31. Analysts had expected a loss of 49 cents a share. Canopy also said it would continue with cost-cutting efforts. “We plan to take further steps to reduce our costs and right-size our business to ensure that we can generate a healthy margin profile and cash generation in the coming years,” chief financial officer Mike Lee said in the company’s earnings release.

Enbridge Inc., meanwhile, reported a 5.3-per-cent increase in adjusted earnings to $1.23-billion in the latest quarter. On a per share basis, Enbridge reported earnings of 61 cents, falling short of the 63 cents analysts had been expecting. Shares were down nearly 2 per cent just after the opening bell.

Elsewhere, Agnico Eagle Mines Ltd fell 11 per cent in early trading on the TSX after the miner cut its production outlook for the year.

On Wall Street, shares of chip maker Nvidia Corp. jumped more than 7 per cent on the Nasdaq after the company forecast first-quarter growth above analysts’ expectations despite a hit from the coronavirus outbreak. Nvidia said it expects current-quarter revenue of US$3-billion, plus or minus 2 per cent. The midpoint sits above analysts’ expectation of US$2.86-billion, according to IBES data from Refinitiv.

Shares of rivals Intel Corp. and Advanced Micro Devices Inc. were both positive in early trading.

Overseas, the pan-European STOXX 600 edged up 0.05 per cent by afternoon although disappointing results from AstraZeneca and Renault weighed on indexes in Britain and France, respectively. Britain’s FTSE 100 was off 0.04 per cent while France’s CAC 40 slipped 0.16 per cent. Germany’s DAX gained 0.14 per cent.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent for weekly gain of 1.8 per cent. Reuters also noted that China’s blue-chip CSI300 shares rose 0.7 per cent and have now clawed back 95 per cent of their losses made after the outbreak.

Japan’s Nikkei finished the week’s final session down 0.59 per cent. The Shanghai Composite Index gained 0.38 per cent. Hong Kong’s Hang Seng added 0.31 per cent.

Commodities

Crude prices shifted higher and looked set to post a weekly gain on continued hopes that OPEC and its allies will take action to shore up weaker demand sparked by the spread of the coronavirus.

The day range on Brent so far is US$56.15 to US$56.99. The range on West Texas Intermediate is US$51.32 to US$52.02. Brent has risen more than 3 per cent since last Friday and looks likely to record its first weekly increase in six weeks. So far, WTI is up more than 2 per cent on the week.

A OPEC technical committee has recommended that members and their allies cut daily production by another 600,000 barrels to offset weaker demand. While Russia has yet to agree to the cuts, analysts have said Moscow’s participation is likely.

“The Russian’s have pretty much signaled that everyone is on board for OPEC + delivering deeper production cuts,” OANDA senior analyst Edward Moya said in a recent note. “The final decision comes from the government and that could mean we are just waiting for President Putin to secure some additional non-public concessions from the Saudis.”

AxiTrader strategist Stephen Innes noted that crude prices in Asia were mostly flat as traders look to put a choppy week behind them.

“It’s all about the waiting game as traders sit on their hands hoping for Russia to play ball before taking on more oil risk (or not play ball if you’re short),” he said.

Gold prices, meanwhile, pulled back as equity markets steadied.

Spot gold was down 0.1 per cent at US$1,575.31 an ounce, having touched its highest since Feb. 4 at US$1,577.89. U.S. gold futures were flat at $1,579.

“I don’t see much reason to own gold at current levels (US$1,572-US$1,576) as a short term trade with risk sentiment holding up,” Mr. Innes said. “And as U.S. retail sales loom large against the backdrop of a robust U.S. jobs market, in the absence of any adverse virus headlines risk-on sentiment could push gold prices lower into the NY close.”

Currencies

The Canadian dollar moved higher in early going as crude prices firmed and global equity markets steadied, suggesting investors are again opting for riskier holdings despite lingering concerns about the spread of the coronavirus.

The day range on the loonie is 75.36 US cents to 75.52 US cents.

“Markets are mildly risk-positive and FX risk proxies are generally above yesterday’s lows,” RBC chief currency strategist Adam Cole said.

For the loonie, the only data point set for release on Friday was the January report on existing home sales, although the numbers are largely considered second-tier and unlikely to move the currency, Mr. Cole said.

On global currency markets, the U.S. dollar index, which weighs the greenback against a basket of currencies, hit its best level since October and has gained 0.4 per cent so far this week, adding to the previous week’s 1.3-per-cent increase.

Japan’s yen rose to 109.77 per U.S. dollar on Friday, following a 0.25-per-cent increase on Thursday.

In the onshore market, China’s yuan fell 0.06 per cent to 6.9818 per U.S. dollar, while its offshore counterpart recovered earlier losses and was last at 6.985, following a 0.2 per cent decline during the previous session.

Britain’s pound consolidated gains around the US$1.3060 mark after advancing on Thursday when the announcement of a new British finance minister bolstered hopes that the next budget would increase spending to bolster the economy.

More company news

Montreal’s MTY Food Group Inc. said Friday it is postponing the release of its fourth-quarter results in the wake of claims made by a “whistleblower employee.” The results were scheduled for release Feb. 18. The company didn’t detail the allegations. “The decision follows certain allegations recently made by a purported whistleblower employee,” MTY said in a release. “While MTY believes that these allegations are baseless and frivolous, the board of directors, out of extreme precaution, will take the required amount of time to address the matter in the appropriate manner.”

Tesla priced its second offering of stock at US$767 apiece Friday, The Associated Press reports. An announcement Thursday that Tesla would put an additional US$2-billion worth of stock on the market surprised almost everyone. Just two weeks ago, CEO Elon Musk said the company had enough cash to fund its capital programs and that it didn’t need to raise any more money.

Drug maker AstraZeneca said it expects 2020 revenue growth in the high single-digit to low double-digit percentages, including a hit it now expects from the coronavirus outbreak in China. The company said the guidance assumed an unfavourable impact from China lasting up to a few months as a result of the outbreak, which has killed over 1,300 people and is still spreading. Product sales for the three months ended Dec. 31 rose 9 per cent to US$6.25-billion, on a constant-currency basis, marking the sixth consecutive quarter of growth after years of sliding sales due to patent losses on older medicines.

French car maker Renault warned that auto demand remained volatile, cut its dividend for 2019 and set a lower operating margin goal for 2020, a crunch year in which it wants to reboot its partnership with Japan’s Nissan. The company posted an annual profit loss of 141 million euros - its first in 10 years - for the group share of net income, penalized by charges linked to some of its Chinese joint ventures and as Nissan’s contribution shrank.

Pot grower CannTrust Holdings Inc on Thursday named Greg Guyatt as chief executive officer, months after it fired Peter Aceto following a Health Canada finding that the marijuana producer grew cannabis in unlicensed rooms.

Economic news

U.S. retail sales rose 0.3 per cent in January. Figures for December were revised down to show retail sales gaining 0.2 per cent instead of climbing 0.3 per cent as previously reported. Core retail sales excluding automobiles, gasoline, building materials and food services were unchanged in January.

The Canadian Real Estate Association says national home sales fell 2.9 per cent in January from a month earlier. Year-over-year actual sales were up 11.5 per cent. Year-over-year the national average sales price rose 11.2 per cent.

(10 a.m. ET) U.S. business inventories for December.

(10 a.m ET) U.S. University of Michigan Consumer Sentiment Index for February.

With Reuters and The Canadian Press