What Every Canadian Investor Needs To Know Today

Major North American stock indexes opened higher on Tuesday, with the Nasdaq up more than 1%, as Moscow’s withdrawal of some troops near Ukraine assuaged fears of a potential Russian invasion slightly.

The Dow Jones Industrial Average rose 120.02 points, or 0.35%, at the open to 34,686.19. The S&P 500 opened higher by 27.61 points, or 0.63%, at 4,429.28, while the Nasdaq Composite gained 206.26 points, or 1.50%, to 13,997.18 at the opening bell.

Canada’s main stock index opened higher as well, although weakness in commodity-linked shares limited gains. At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 36.43 points, or 0.17%, at 21,388.94.

Russia said some of its military units were returning to their bases after exercises near Ukraine, following days of U.S. and British warnings that Moscow might invade its neighbor at any time. However, it was not immediately clear if it was a temporary signal of any kind of significant pullback.

The latest Russia-Ukraine development drew a cautious response from Ukraine and Britain, after days of U.S. and British warnings that Moscow might invade its neighbor at any time.

British Prime Minister Boris Johnson and U.S. President Joe Biden had agreed in a call on Monday there was a crucial window for diplomacy.

The CBOE Market Volatility index, a gauge for investor anxiety, fell back after shooting up to its highest level in nearly three weeks in the previous session.

“War or no war, it makes market very volatile. And that’s unfortunately what we have to deal with,” said Andrea Cicione, head of strategy at TS Lombard in London.

“Until markets feel comfortable enough that this is not going to happen, we’re going to get this kind of volatility quite regularly.”

Data out this morning showed that wholesale inflation in the United States surged again last month, rising 9.7% from a year earlier - a tad higher than Street expectations of 9%. From December, the producer price index was up 1%. Excluding volatile food and energy prices, wholesale inflation rose 0.8% from December and 8.3% from January 2021. Stock and bond markets held steady upon the report’s release.

In corporate news this morning, TC Energy Corp. raised its dividend to 90 cents a share, from 87 cents, as it reported a fourth-quarter profit of $1.1 billion. TC Energy says its comparable earnings for fourth quarter 2021 amounted to $1.06 per share compared with $1.15 per share in 2020. Analysts on average had expected an adjusted profit of $1.07 per share, according to Refinitiv. Shares are up 0.8% in early trading.

Restaurant Brands International Inc., meanwhile, beat estimates for quarterly revenue and profit, led by soaring online sales and a recovery in demand at its Burger King and Tim Hortons chains. Restaurant Brands’ total revenue rose about 14% to $1.55 billion in the fourth quarter ended Dec. 31, beating estimates of $1.52 billion, according to IBES data from Refinitiv. Excluding items, the Toronto, Ontario-based company earned 74 cents per share, topping estimates of 69 cents. Shares are up more than 4%.

U.S.-listed shares of Suncor Energy were down about 3%, under pressure both from lower crude oil prices and a downgrade by RBC. The bank lowered its rating to “sector perform” from “outperform”, commenting that it sees better upside from some other energy names, but it raised its price target to C$42 from C$37.

The major U.S. indexes have had a rocky start to 2022, with the tech-heavy Nasdaq down over 11.8% so far this year as geopolitical tensions rattled investors’ sentiment already hit by worries over aggressive interest rate hikes by the Fed to combat surging inflation. But the TSX Composite Index has escaped much of the downward pull, thanks to its heavy weighting in energy stocks as well as financials, which tend to benefit from higher interest rates. The TSX is up 0.6% year to date.

Markets are pricing a 60.5% chance of a 50 basis point hike and a 39.5% chance of a 0.25% hike at the central bank’s March meeting. Minutes from the Fed’s January policy meeting are due on Wednesday.