The Toronto stock market looked set for a slightly positive open Wednesday amid mixed commodity prices and ahead of a couple of pieces of key American economic data.
The Canadian dollar ticked up 0.01 of a cent to 93.09 cents US. The loonie had dipped slightly Tuesday while the greenback strengthened in the wake of positive readings on home sales and consumer confidence.
U.S. futures were tepid with the Dow Jones industrial futures down two points to 16,750, the Nasdaq futures were unchanged at 3,794.5 and the S&P 500 futures added 1.1 points to 1,944.3.
Investors will take in the release of the final revision to U.S. first quarter gross domestic product. The data is expected to show that the economy shrank by 2% in the period, largely due to harsh winter weather. That’s about double the amount of contraction originally thought, but the damage was expected to be short-lived.
“Given the influence of temporary factors in Q1, growth should charge back to a 3.8% pace in Q2 as inventory investment bounces back and as spending on consumer goods and business investment re-accelerates,” said BMO Capital Markets economist Aaron Goertzen.
U.S. durable goods orders for May are also on tap. It is expected that they grew 1% month-over-month.
The TSX and New York markets finished sharply lower on Tuesday despite data that showed that new home sales were at their best level in May in six years while the New York-based Conference Board’s June reading on consumer confidence came in well ahead of expectations.
However, indexes in Toronto and New York are close to record highs and investors wonder where the next catalyst is coming from. Also, inflationary pressures are building, raising concerns about when the Federal Reserve might boost interest rates.
Investors were also prompted to cash in their gains after fresh reports of violence in Iraq, including unconfirmed airstrikes by Syrian warplanes, that raised fears that the conflict could spiral into a broader regional conflict.
On the commodity markets, August crude on the New York Mercantile Exchange gained 39 cents to US$106.42 a barrel.
Oil prices had risen steadily over the past couple of weeks amid a rising insurgency in Iraq. Prices stepped back over the last two days as fears receded that the insurgency would greatly affect the country’s oil production and exports.
However, U.S. benchmark crude futures rose Wednesday after The Wall Street Journal reported that the U.S. government was loosening a longstanding ban by letting two companies sell American oil internationally. The newspaper said the Obama administration would allow foreign buyers to purchase a type of ultralight oil known as condensate, which can be turned into gasoline, jet fuel and diesel.
Metal prices were lower with July copper off a cent to US$3.14 a pound, while August bullion dropped $6.40 to US$1,314.90.
On the corporate front, Pengrowth Energy Corp. (TSX:PGF) announced a doubling of the value of its proven reserves at its flagship Lindbergh bitumen project in Alberta from $1 billion to $2 billion.