TSX Futures Edge Up on Earnings and US CPI

The S&P/TSX Composite Index futures inched higher on Wednesday amid a fresh batch of corporate earnings reports and July's US inflation data. Constellation Software reported higher second-quarter net income and beat EPS estimates. Franco-Nevada posted second-quarter profit of $354 million and adjusted earnings of $1.81 per share, missing expectations. Markets also awaited quarterly results from Metro, Hydro One and other companies. Headline US inflation eased slightly to 3.4% in July from 3.5% in June, in line with forecasts. Combined with soft labor market data from July, the in-line inflation reading could support expectations for a more dovish Fed, benefiting credit-sensitive North American equities. Meanwhile, the Bank of Canada is widely expected to keep interest rates unchanged at its September meeting.

The S&P/TSX Composite Index edged higher to close at 36,476 on Tuesday, reaching a fresh record slightly above the previous session's high, supported by energy stocks. The energy sector advanced as crude oil prices pared earlier losses after Iran reiterated that it would keep the Strait of Hormuz closed until its demands are met. Canadian Natural gained 0.7%, Suncor rose 0.9%, Imperial Oil added 0.5%, and Cenovus advanced 0.9%. Financials were mixed, with Brookfield Asset Management jumping 4.6% on strong fee revenue growth and a major fundraising effort, while major banks mostly declined. Investors now await Wednesday's US CPI report for fresh clues on the Fed's policy outlook, while strong Canadian labor data from last week kept expectations for a hawkish BoC in focus. Among miners, Franco-Nevada fell 0.2% ahead of its earnings report, while investors continued to digest Barrick's (-2.1%) results. In tech, Shopify shed 1.8% and Constellation Software lost 2.5% ahead of its earnings.

The S&P/TSX Composite Index rose to a record above 36,500, with support from heavyweight banks. Oil prices trimmed earlier losses after a spokesperson for Qatar’s foreign ministry said negotiations between Oman and Iran were at an advanced stage, offering some hope of progress toward an agreement. Financials traded higher, with TD Bank, BMO, CIBC and Scotiabank up about 1% each, while Brookfield gained more than 2%. Markets are now turning to Wednesday’s US consumer price index for July, which is expected to provide fresh clues on the Federal Reserve’s policy outlook. Meanwhile, expectations of a hawkish Bank of Canada remained after strong domestic labor data released last week. Among miners, Franco-Nevada (+0.2%) was in focus ahead of its earnings report after the bell, while investors continued to digest Barrick’s (-1%) results from Tuesday. In tech, Shopify shed more than 1%, while Constellation Software edged lower ahead of its earnings report.