Equity Markets
Dow futures are up triple digits, setting the stage for a strong open on Wall Street after the U.S. Senate Republicans were able to pass a bill that will revamp the country's tax system lifted investor sentiment. The bill still needs final passage, however.
That news was also bolster by a big corporate deal with U.S. drugstore operator CVS Health announcing it will buy U.S. health insurer Aetna for $69-billion.
Some of the early gainers included bank and industrial stocks. Bank of America and JPMorgan rose more than 2 per cent, while Caterpillar and Boeing gained more than 1.5 per cent.
The strong news on Wall Street bolstered the TSX 60 futures as well and pointed to a strong opening on Bay Street.
Overseas, Markets reacted to the U.S. Senate's approval on Saturday for the biggest tax law change since the 1980s, taking President Donald Trump closer to his goal of slashing taxes for businesses.
"With this tax deal, markets could pick up speed into the end of the year. It looks like the ingredients for a year-end rally are there," said Angelo Meda, head of equities at asset manager Banor SIM in Milan, predicting equity gains of 3 to 4 per cent.
Tax cut hopes have been a significant tailwind this year for U.S. stocks, although the move is expected to add to the country's $20-trillion national debt and increase the chances of more aggressive near-term rate rises in the world's largest economy.
Britain's FTSE was up 0.48 per cent as Prime Minister Theresa May headed for a crunch meeting with European Union officials to break a deadlock in Brexit talks.
Germany's DAX was up 1.32 per cent and France's CAC gained 1.07 per cent.
World stocks rose just 0.18 percent, though they stayed off recent record highs, following a shaky start in Asia caused by early selling in technology shares.
While Japanese shares closed half a per cent lower most other Asian markets managed to end in the black .
Japanese consumer confidence improved in November to its highest level in four years, lifted by surging stock prices and a robust job market, the Cabinet Office said on Monday. The sentiment index for general households, which includes views on incomes and jobs, rose 0.4 point from the previous month to 44.9, up for a third straight month and marking the highest since September 2013. However, the Nikkei slid 0.49 per cent.
The Shanghai index fell 0.22 per cent and the Hang Seng gained 0.22 per cent.
Commodities
Oil fell on Monday after U.S. shale drillers added more rigs last week, but prices still held close to their highest since mid-2015, supported by an extension to output cuts agreed last week by OPEC and other producers.
Drillers in the United States added two oil rigs in the week to Dec. 1, bringing the total count to 749, the highest since September, energy services company Baker Hughes said in its closely followed report late on Friday.
February Brent crude futures were down 54 cents at $63.19 a barrel by, while U.S. West Texas Intermediate was down 61 cents at $57.75.
The Brent price hit a two-year high of $64.65 a month ago and has since attracted record investment by fund managers.
The U.S. rig count, an early indicator of future output, has risen sharply from 477 active rigs a year ago after energy companies boosted spending plans for 2017.
The price of gold fell on Monday towards the four-week lows hit last week as the dollar rose after U.S. politicians over the weekend approved a major tax overhaul and the market looked ahead to a meeting of the Federal Reserve later this month.
Spot gold was down 0.6 percent at $1,273.00 an ounce compared with last Thursday's $1,270.11, its lowest level since Nov. 6. U.S. gold futures fell 0.5 per cent to $1,275.90 an ounce.
"Prospects for large U.S. tax cuts are a negative for gold ... What the Fed does will be very important," said Quantitative Commodity Research consultant Peter Fertig. "There is a negative influence coming from other commodities like oil, the dollar is stronger and risky assets are up."
Lower oil prices could mean subdued price pressures which is a negative for gold, often used as a hedge against inflation.
Currencies and bonds
The U.S. dollar rose amid the news of the tax deal, pushing the greenback up as much as 0.4 percent against a basket of currencies, while Treasury yields rose across the curve.
The Canadian dollar gained and was edging closer to the 79-cent (U.S.) mark.
Two-year yields matched Friday's nine-year high , indicating that bonds are already anticipating the debt increase.
"This environment should question whether the market is being too conservative in only pricing 50 basis points of (U.S. Federal Reserve) tightening next year," analysts at ING Bank told clients.
"Loose fiscal and tight monetary policy should be sending the dollar firmer."
For the time being, the dollar gave up some early gains against the euro and sterling, which traded around 0.3 percent lower to the dollar . Many warn of risks ahead, especially a U.S. government shutdown, should this Friday's deadline to authorise new borrowing pass without a deal.
Yields were higher across the board on Monday as euro zone government bonds caught up with movements in U.S. Treasuries.
"We had quite high valuations on European government bonds on Friday following the Flynn revelations, so Bunds had some catching up to do after the Senate passed the tax bill this weekend," said DZ Bank analyst Rene Albrecht.
Tax cuts in the United States should boost growth and inflation and therefore increase the possibility of more aggressive rate hikes, he said.
"Secondly, the cuts add another $1.5-trillion to U.S. debt over the next 10 years, so U.S. Treasuries should be cheaper," he said.
The Canada 10-year bond yield was lower at 1.93 per cent.
Stocks set to see action
CVS Health is buying Aetna for about $69-billion in cash and stock in a first-of-its kind deal aimed at fending off challenges in retail and health care, the companies announced on Sunday. It's one of the year's largest deals. It combines CVS's pharmacy and pharmacy benefit manager (PBM) platform with Aetna's insurance business. CVS shares were down 0.3 per cent in premarket trading while Aetna's stock gained 3.4 per cent.
David Baazov and two associates conspired to try to pump up the price of Amaya Inc. stock in the leadup to its $4.9-billion (U.S.) takeover of PokerStars, Quebec's securities regulator alleges in a new court filing ahead of their insider trading trial later this month.
General Cable jumped 36 per cent after Italian rival Prysmian agreed to buy the cable maker, valuing the company at about $3 billion, including debt.
Blue Apron rose 6.8 per cent after Barclays upgraded the meal-kit delivery company's stock to "equal-weight", supporting its move to promote its chief financial officer as the chief executive.
Chipmaker Broadcom Ltd. took its first formal step toward a hostile bid to take over Qualcomm Inc. on Monday, unveiling a list of 11 nominees to the board of the U.S. semiconductor firm. The nine men and two women included a former president of the mobile networks business group of Nokia and the former director and chairman of the board of Dialog Semiconductor Plc. Broadcom stock rose 0.65 per cent in premarket trading while Qualcomm stock was down 0.2 per cent.
GNC Holding shares rose 1.9 per cent in premarket trading after it announced it had retained Goldman Sachs as an adviser to help evaluate alternatives to "enhance shareholder value."
Shares of United Parcel Service rose 1.7 per cent after Deutsche Bank upgraded the stock to a "buy" from "hold" and boosted its price target to $135 from $125.
More reading: Monday's TSX breakouts
More reading: Monday's small-cap stocks to watch
Economic News
(10 a.m. ET) U.S. factory orders for October are unveiled. The consensus estimate on the Street is a decline of 0.4 per cent from September.
With files from Reuters and Bloomberg