Equity Markets
Canada's main stock index opened higher on Tuesday, following the Victoria Day holiday on Monday, as financial stocks led broad gains and BlackBerry jumped more than 8 per cent.
The Toronto Stock Exchange's S&P/TSX composite index rose 54.04 points, or 0.35 per cent, to 15,512.50. Eight of the index's 10 main groups were in positive territory.
U.S. stocks were slightly higher ahead of U.S. President Donald Trump's first full budget plan that is aimed at slashing government spending and trimming the deficit.
Trump is set to propose a raft of politically sensitive cuts, including to healthcare and food assistance programs for the poor, with the aim of chopping government spending by $3.6-trillion and balancing the budget over the next decade.
Congress holds the federal purse strings and often ignores presidential budgets, which are proposals and may not take effect in its current form.
"In the U.S. all eyes are on Trump's budget proposal. The budget will not pass in its current state, but people will keep an eye on any sort of indication of corporate tax reform as well as infrastructure spending," said Nadia Lovell, US Equity Strategist at J.P. Morgan Private Bank in New York.
The Dow Jones Industrial Average was up 12.35 points, or 0.06 percent, at 20,907.18, the S&P 500 was up 1.30 points, or 0.05 per cent, at 2,395.32 and the Nasdaq Composite was off 6.20 points, or 0.10 per cent, at 6,127.42.
Nine of the 11 major S&P 500 sectors were higher, with the health index's and technology sector's 0.23 percent rise leading the advancers.
Overseas, investors continued to grapple with U.S. uncertainty and a deadly bomb blast at a concert in Britain killed 22 people subdued the pound, but euro zone PMI surveys, showing the bloc's firms on their strongest run since 2011, lifted the mood on the markets.
Alongside strong headline numbers, one of the most eye-catching details in the data was the biggest manufacturing sector job growth reading in the survey's 20-year-history and overall employment gains were the second best in a decade.
"It's a very good result and it's broad based. We've got a good pace of growth here. The fact we have maintained this high level in May is great news for second quarter GDP," said Chris Williamson, chief business economist at IHS Markit."
Asian trading had seen a modest pull back in risk appetite with MSCI's broadest index of Asia-Pacific shares not including Japan dropping back from near two-year highs. The Nikkei closed off 0.33 per cent, while the Shanghai index slipped 0.45 per cent and the Hang Seng was up 0.05 per cent.
In Europe, Germany's Dax rose 0.08 per cent, London's FTSE rose 0.15 per cent and France's CAC gained 0.38 per cent.
Commodities
Oil prices fell on Tuesday, weighed down by U.S. President Donald Trump's plan to sell off half the country's huge oil stockpile, threatening a future glut even as OPEC and its allies cut output to try and tighten the market.
The White House plan to sell off half of the nation's 688 million-barrel oil stockpile from 2018 to 2027 aims to raise $16.5-billion and help balance the budget.
The budget, to be delivered to Congress on Tuesday, is only a proposal and may not take effect in its current form.
"Congress needs to agree to this which is rather uncertain," said Carsten Fritsch, commodity analyst at Commerzbank. "But of course, it could weigh on the back end of the forecast."
A release of U.S. strategic reserves could jolt an already imbalanced oil market and undermine attempts by The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, to end a persistent glut.
OPEC, led by Saudi Arabia, and other participating producers will meet on May 25 and are expected to extend the period of their pledge to cut output by 1.8 million barrels per day from just the first half of this year to all of 2017 and the first quarter of 2018.
Brent crude futures were trading down 43 cents, or 0.8 per cent, at $53.44 (U.S.) per barrel. U.S. West Texas Intermediate (WTI) futures were at $50.71, down 42 cents, or 0.8 per cent.
On Tuesday, Kuwait's oil minister said not all OPEC countries and allies were on board for a nine month extension and producers would discuss this week whether to extend output cuts by six or nine months.
Gold was little changed, struggling to push higher after two weeks of solid gains despite a weaker U.S. dollar and a deadly suicide attack in the British city of Manchester.
Spot gold was up 0.1 per cent at $1,260.40 (U.S.) per ounce, having gained some 3.6 per cent since May 9. U.S. gold futures slipped 0.1 per cent to $1,260.60 an ounce.
The blast, which killed at least 22 people, weighed on sterling versus the dollar, but the U.S. currency was also near 6-1/2 month lows against a basket of currencies, underlining a collapse of faith in U.S. growth and inflation prospects.
"Gold is taking a breather once again, its struggling to make it out of this $1,245-$1,265 range," said Ole Hanson, head of commodity strategy at Saxo Bank.
"At this stage, unless we get other developing (political risk) stories, the market is not prepared to break this range until further guidance from the Federal Open Market Committee."
Currencies and bonds
The dollar dipped against the basket of currencies that measures its broader strength on Tuesday, low 10-year U.S. Treasury yields underlining the collapse of faith in a promised boost to growth and inflation from the Trump administration.
The U.S. dollar index, which tracks the greenback against a basket of trade-weighted peers, was flat at 96.97.
U.S. Treasury yields continued to underscore fading expectations for fiscal stimulus from the Trump administration. The White House will present Trump's first full budget plan to lawmakers on Tuesday. Its proposals include a $3.6-trillion cut in government spending over 10 years, balancing the budget by the end of the decade.
Moves in the major currencies were tight, but the common denominator was a broadly weaker dollar, down 0.2 percent against the yen, the euro and as much as half a percent against a resurgent New Zealand dollar.
"The 10-year Treasury yield is down 2 basis points and that is feeding through to the dollar underperforming," said Sam Lynton-Brown, a currency strategist with BNP Paribas in London.
The Canadian dollar was up 0.22 at 74.27 cents (U.S.) as gold prices rose.
Stocks set to see action
Canada's banks will be in focus this week as they start rolling out their second-quarter financial results this week, with the mortgage market in focus and investors eyeing a rise in dividends. Stock prices of the Big Six banks are reflecting some unease following the recent challenges of Home Capital Group Inc.
Ford Motor Co. abruptly named James Hackett as chief executive on Monday, responding to investors' growing unease about the U.S. automaker's slumping stock price and its ability to counter threats from longtime rivals and Silicon Valley. He replaces Mark Fields, 56, who spent less than three years as CEO. Its shares rose 0.6 per cent in premarket trading.
AutoZone posted disappointing results, with quarterly profit of $11.44 per share short of expectations of $12. Revenue also disappointed and comparable store sales fell 0.8 per cent. Its shares fell 7.1 per cent in premarket trading.
U.S. luxury homebuilder Toll Brothers Inc. reported a 40-per-cent rise in quarterly profit, boosted by an increase in home sales. The company said its net income rose to $124.6-million (U.S.), or 73 cents per share, in the second quarter ended April 30 from $89.1-million, or 51 cents per share, a year earlier. Revenue rose 22.2 per cent to $1.36-billion. Its shares rose 3.2 per cent in premarket trading.
Agilent Technologies posted solid results and beat estimates by 10 cents, with adjusted quarterly profit of 58 cents per share. It also raised its full year guidance. Its shares rose 4.5 per cent in premarket trading.
Videogame maker Take-Two Interactive was up 2.4 per cent even after it forecast full-year revenue well below analysts' estimates. It also said one of its key games would be delayed until next year and cut its full-year outlook as a result.
Proxy adviser Institutional Shareholder Services (ISS) has recommended that owners of CSX Corp. stock vote in favour of an $84-million payment related to the appointment of new Chief Executive Officer Hunter Harrison, who has said he will resign from CSX if shareholders fail to approve the reimbursement.
More reading: Tuesday's small-cap stocks to watch
More reading: A beginner's guide to coping with market mayhem
More reading: Amid shareholder skepticism, is now the best time to invest in Cenovus?
Economic News
(8:30 a.m. ET) Canada wholesale trade for March. Estimate is a decline of 0.3 per cent from Februrary.
(9:45 a.m. ET) U.S. Markit PMI
(10 a.m. ET) U.S. new home sales for April. The Street's expectation is an annualized rate decline of 1.8 per cent.
Also: White House releases U.S. President's fiscal 2018 budget proposal.
With files from Reuters and Bloomberg