TSX higher after better-than expected Canadian GDP data

Investing.com - Canada’s main stock index were higher on Friday, after stronger-than-expected quarterly GDP data

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The S&P/TSX Composite index 157 or 0.5% at 31,354.17.On Thursday, the index ticked up by 0.1% to 31,196.71, exceeding an all-time closing high logged in the preceding session.


Canadian economy grew at an annualized pace of 2.6% in the third quarter as crude oil exports and government spending boosted economic activity even as business investments and household consumption disappointed. Economists had forecast growth of 0.5%.

It was the fifth straight day of gains for the average, although were lighter than usual because of the Thanksgiving holiday in the United States.

Analysts are now gearing up for the release of Canada’s third-quarter gross domestic product data, with forecasts calling for expansion at an annualized rate of 0.5%, according to estimates cited by Reuters.

This would mean that Canada’s economy narrowly avoided second straight quarterly contraction. The Bank of Canada has been keeping close tabs on the trajectory of the economy as it prepares to roll out another interest rate decision in December.

The BoC, which slashed its benchmark rate to a three-year low of 2.25% last month, is reportedly widely tipped to leave borrowing costs on hold at the upcoming meeti.

Tech outage disrupts U.S. stock futures

Wall Street futures trading was halted by an outage on exchange operator CME Group’s platform. U.S. stock markets opened higher on Friday, following an outage on exchange operator CME Group’s platforms which halted futures contract trading for hours. as investors returned for a session on Friday shortened by the Thanksgiving holiday.

The benchmark S&P 500 had risen by 16 points, or 0.2%, the tech-heavy Nasdaq Composite had climbed by 88 points, or 0.4%, and the blue-chip Dow Jones Industrial Average had added 99 points, or 0.2%. Markets on Wall Street were closed on Thursday for the Thanksgiving holiday.

The CME Group said in a statement that the outage was due to a technical issue at CyrusOne data centers, and that the company was working on a fix. Dallas-based CyrusOne operates more than 55 data centers in the U.S., Europe and Japan.

A host of commodities and agricultural goods contracts appeared to be disrupted by the outage, which came as volumes are anticipated to be muted during the holiday-truncated session.

Wall Street buoyed by December rate cut bets, Fed Chair speculation

The major U.S. averages have rebounded this week, aided by renewed bets that the Federal Reserve will cut interest rates next month.

Although some Fed policymakers have called for borrowing costs to remain unchanged at their current range of 3.75% to 4% due to a recent lack of fresh economic data, other officials have argued for a cut to help bolster an ailing American labor market. The Fed previously slashed rates in October and September.

According to CME FedWatch, there is now a roughly 85% chance of a quarter-point drawdown in rates at the Fed’s December 9-10 gathering, up sharply from last week.

Meanwhile, speculation over a more dovish successor to Fed Chair Jerome Powell also aided sentiment, after a report said White House economic adviser Director Kevin Hassett was the front-runner to be the next Fed Chair. Hassett is expected to largely back President Donald Trump’s demands for sharply lower interest rates.

This has helped to ease emerging fears around a possible bubble forming in the artificial intelligence boom. These concerns, driven in large part by frothy tech stock valuations, circular financing in the AI sector, and an uncertain economic backdrop, have threatened to weigh on stocks throughout the month.

All of the benchmark indices on Wall Street are on track to post declines in November.

PCE due next week

Much of the focus next week is set to revolve around a host of economic readings, which will be among the few official data points the Fed will have prior to its December meeting.

Key among these is the personal consumption expenditures price index -- one of the Fed’s preferred inflation gauges -- which will be published on December 5. However, delays to the release of the figures because of a record-long federal government shutdown mean that the data will only cover the month of September.

As a result, some analysts have suggested that these numbers may not be totally reflective of the current state of the American economy. Government officials have scrapped inflation and labor readings for October as well, citing a lack of time needed to collect data for the reports due to the shutdown.

WTI hit by CME outage

U.S. West Texas Intermediate crude futures were frozen after the system outage at CME Group, with traders saying they were informed of the halt just before 0300 GMT.

The contract was last exchanging hands up 0.73% at $59.08 a barrel. There was no settlement on Thursday because of the Thanksgiving holiday.

Meanwhile, front-month Brent crude futures for January, which are set to expire on Friday, had slipped by 0.1% to $63.26 a barrel. The more actively traded February contract was down 0.1% at $62.84 a barrel. Brent oil is traded on the Intercontinental Exchange, or ICE.

Hovering over moves in the Brent contract were ongoing peace talks to end the war in Ukraine, as well as an upcoming meeting this weekend of the Organization of the Petroleum Exporting Countries and its allies, a producer group known as OPEC+. Sources cited by Reuters said OPEC+ is likely to leave oil output levels unchanged and agree on a mechanism to gauge the maximum capacity of member nations.

Spot gold climbs

Gold prices rose on Friday and were headed for a fourth straight month of gains in November.

Bullion prices had briefly fallen in the prior session, but rapidly resumed their ascent as traders largely held onto bets on a December cut by the Fed. The yellow metal, a non-yielding asset, tends to perform better in lower rate environments.

Spot gold rose 0.4% to $4,173.65 an ounce by 06:57 ET. Trading in futures of gold and other metals was disrupted by the CME outage.