The Toronto stock market looked set to open higher Wednesday as investors took in data showing the Canadian economy hit the brakes in the second quarter while CIBC delivered a solid earnings report.
Statistics Canada reported that gross domestic product declined by 0.1 per cent, which followed a 0.9 per cent increase in the January-March period.
The agency says the drop in GDP was largely a result of a 2.1 per cent drop in exports. Energy exports were down almost seven per cent, which reflected a shutdown in the energy sector.
Real GDP in the second quarter declined 0.4 per cent on an annualized basis after expanding 3.6 per cent in the first quarter.
The Canadian dollar rose 0.15 of a cent to 102.38 cents US.
The TSX could find support from the financial sector after CIBC said its third-quarter profits grew by 26 per cent to $808 million. Cash earnings came in at $1.91 a share, a dime above expectations. Revenue of $2 billion was up three per cent from the third quarter of 2010, primarily due to solid growth in personal banking. CIBC also said it would boost its quarterly dividend by three cents to 90 cents per share.
Meanwhile, U.S. futures pointed to a positive session ahead of some key economic data also coming out in the morning.
The Dow Jones industrial futures gained 95 points to 11,587, the Nasdaq futures rose 20 points to 2,247 and the S&P 500 futures were up 12 points to 1,216.8.
Traders also took in data on U.S. private sector job creation from payroll firm ADP, which were released two days before the U.S. government’s non-farm payrolls report. ADP said 91,000 private sector jobs were created, missing expectations of 100,000 jobs.
Expectations for the non-farm payrolls report are even more modest, with economists predicting that the overall U.S. economy created only about 80,000 jobs in August.
Other data includes the Chicago purchasing managers index for August and factory orders for July.
North American indexes were positive on Tuesday despite a survey showing a slump in consumer confidence in the U.S. after the release of minutes from the Aug. 9 Federal Reserve meeting on interest rates hinted of possible Fed action to boost the U.S. economy.
Oil prices dipped after four days of advances as the October crude contract on the New York Mercantile Exchange lost 51 cents to US$88.39 a barrel.
Metal prices also advanced as the December gold contract on the Nymex gained $4.30 to US$1,834.10 an ounce. Copper prices gained four cents to US$4.16 a pound.
Meanwhile, Asian markets made broad-based advances Wednesday.
Japan’s benchmark Nikkei 225 logged a fifth day of gains to close narrowly up, Hong Kong’s Hang Seng jumped 1.6 per cent, South Korea’s Kospi gained two per cent and Australia’s S&P/ASX 200 rose 0.6 per cent.
Mainland Chinese shares were mixed, with the benchmark Shanghai Composite Index gaining marginally while the Shenzhen Composite Index lost 0.4 per cent.
European markets were higher with London’s FTSE 100 index up 1.07 per cent, Frankfurt’s DAX ahead 1.39 per cent and the Paris CAC 40 up 1.67 per cent.
In other earnings news, transportation giant Bombardier Inc. (TSX:BBD.B) reported second-quarter net income of US$211 million, compared with US$138 million in same period last year, and per share earnings of 12 cents, compared with seven cents last year. Bombardier says revenue during the quarter increased 17 per cent to US$4.7 billion.
