Mixed global equity moves as AI earnings sway markets, Canadian stocks rise on earnings beats
AI-related earnings reports caused divergent reactions in global markets, while Canadian equities gained on positive corporate results and a stronger loonie.
Global equity markets showed mixed performance on Thursday as investors reacted to AI-driven earnings reports. Alphabet’s shares fell about 10% in after-hours trading after a large cash burn, erasing roughly US$400 billion in market value, while Microsoft posted better-than-expected cloud growth and sales, lifting its shares more than 5% after the close. The divergent outcomes heightened expectations for upcoming results from Amazon and Intel.
In Canada, the Toronto Stock Exchange opened higher, supported by earnings beats from several domestic companies. Restaurant Brands International, the parent of Tim Hortons, reported third-quarter comparable sales above Wall Street estimates, driven by value meals and new menu items at its Burger King locations in the United States. Other Canadian firms reporting include Air Canada, Teck Resources, TMX Group, TFI International, AltaGas and Centerra Gold.
"The reason why Alphabet is down is because their traditional revenue service of ad generation has been impacted by the very thing which is the AI boom. So it’s causing a mix of results for Google," said Jamie Hannah, deputy head of investments at VanEck.
"Both Alphabet and Microsoft confirmed that the AI revenue generation is still solid," Hannah added.
European markets were broadly positive, with the STOXX 600 up 0.5%, the FTSE 100 gaining 0.42%, the DAX rising 0.97% and the CAC 40 climbing 0.96% in morning trading. In Asia, Japan’s Nikkei closed 1.1% higher, while Hong Kong’s Hang Seng fell 0.59%.
Oil prices slipped as hopes for renewed Middle-East peace talks eased concerns over supply disruptions. Brent crude fell 1.28% to US$113.80 a barrel and WTI dropped 1.5% to US$101.20. Spot gold declined 1.1% to US$4,022.19 an ounce, with December gold futures down 0.4%.
"Selling pressure is prevailing amid expectations that peace talks may resume," said Yuki Takashima, an economist at Nomura Securities. "However, the decline remains limited."
The Canadian dollar strengthened, trading at C$1.3980 per US$1, up about 1.74% over the past month. The U.S. dollar index slipped 0.04% to 102.15. The euro and British pound were largely unchanged against the dollar. U.S. 10-year Treasury yields fell to 5.010%.
Upcoming economic data include U.S. initial jobless claims, personal income and spending, core PCE price index and Q3 GDP figures, as well as remarks from Bank of Canada deputy governors at scheduled events.