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The TSX opened with modest losses Friday, under pressure from weakness in oil and gold prices, while U.S. stocks started the session largely flat.

“Because we’re at these record levels [on Wall Street], people are sort of re-evaluating,” said Chuck Lieberman, chief investment officer at Advisors Capital Management. “We’re still gradually reopening, and setbacks are on their way. It makes people concerned at times.”

Investors are concerned about a stalemate in talks between House Democrats and the White House over the next coronavirus aid bill as about 28 million Americans continued to collect unemployment checks. Still, data continue to show a bounceback in the Canadian and U.S. economies.

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U.S. home sales rose at a record pace for a second straight month in July and home prices hit a record as historically low interest rates boosted demand for homes even as the coronavirus pandemic put millions of people out of work. The National Association of Realtors said on Friday existing home sales rose 24.7% to a seasonally adjusted annual rate of 5.86 million units last month. Data for June was revised down slightly to a 4.70 million unit pace from the originally reported 4.72 million.

Data firm IHS Markit said its flash U.S. Composite PMI Index rose to a reading of 54.7 this month from 50.3 in July as companies in both the manufacturing and services sectors saw a resurgence in new orders.

Meanwhile, Canadian retail sales rose by 23.7% in June, led by higher motor vehicle and parts sales, as the economy continued to reopen from shutdowns tied to the coronavirus pandemic. That was very close to consensus forecasts for the month. In a preliminary flash estimate, Statistics Canada said July retail sales could rise by a more subdued 0.7%.

Surveys from the euro zone out earlier today showed an economic recovery from its deepest downturn on record has stuttered this month. IHS Markit’s flash Composite Purchasing Managers’ Index for the euro zone sank to 51.6 from July’s final reading of 54.9, below all forecasts in a Reuters poll that predicted no change.

On Thursday, the Toronto Stock Exchange’s S&P/TSX composite index ended 0.18% lower at 16,606.76. Unlike U.S. equities, Canada’s main stock index remains well below - by about 7 per cent - its highest levels reached earlier this year before the economic hit of the coronavirus. The Canadian equity market has struggled to recoup all its losses given its big exposure to the out-of-favour energy sector and its only modest exposure to the high-flying technology sector.

Next week brings the start of the earnings season for Canada’s big banks.

Equities

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Commodities

Copper fell on Friday as concerns mounted over the recovery of some of the world’s largest economies, but rising Chinese demand and low inventories kept prices on track for a weekly gain.

Benchmark copper on the London Metal Exchange (LME) shed 1% to $6,534 a tonne by 1032 GMT. The metal widely used in power and construction was set to rise about 2.6% on the week.

Meanwhile, gold eased on Friday as the dollar edged higher, denting bullion’s appeal and setting it on track for a second weekly decline, while lingering concerns over the path to recovery from the coronavirus limited losses.

Spot gold was down 0.5% to $1,933.85 per ounce at 0949 GMT, while U.S. gold futures eased 0.3% to $1,940.00 per ounce.

For the week, gold is down about 0.5%, having slumped more than 3% earlier this week.

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“We are going to be range-bound for the next number of days or weeks until something happens either on the U.S stimulus front or if the U.S.-China tensions take a very positive or negative turn,” said David Madden, market analyst at CMC Markets UK.

Oil prices edged lower on Friday but held near a five-month high as an easing of coronavirus lockdowns aids a slow recovery in fuel demand while major crude producers seek to limit supply.

Currencies and bonds

The Canadian dollar is a little softer against its U.S. counterpart this morning, staying below the 76 cents U.S. level it reached earlier this week, largely reflecting an uptick in the greenback in early trading.

Currency and bond markets in Canada had little reaction to the retail sales figures, as they came in close to expectations.

Commented Shaun Osborne, chief forex strategist with Scotiabank: “Without much to set it apart from its peers, we think the CAD will continue to track the broader trends in risk appetite and the USD for now.”

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Mr. Osborne, in a note, said that short-term technicals suggest the loonie could see some further weakness next week. “The USD is picking up a little more support as our session gets underway but, as we saw earlier in the week, USD gains may well prove fleeting in nature and the USD is still poised to close net down on the week. But short term trend measures have moderated (neutral) and USD gains through the mid 1.32s might well pave the way for a modest extension higher early next week. We still expect strong resistance on USD gains to the low/mid 1.33 zone, however,” he said.

The U.S. Treasury curve is modestly flatter with front end yields little changed and 10-years down 1 basis point to 0.64%.

Also see: David Rosenberg thinks the loonie is in serious trouble

Other corporate news

Deere & Co rose 4.5% premarket after it revised up its full-year earnings forecast and reported a smaller-than-expected decline in quarterly profit.

Pfizer rose 1.5% after reporting positive additional data from an early-stage study of its experimental coronavirus vaccine being developed in collaboration with German biotech firm BioNTech.

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Tesla gained another 1.8% after surging past the $2,000 mark on Thursday for the first time and extending its rally ahead of an upcoming share split.

Read more: Friday’s small-cap stocks to watch

Read more: Friday’s analyst upgrades and downgrades

Economic news

Canadian retail sales rose by 23.7% in June, led by higher motor vehicle and parts sales, as the economy continued to reopen from shutdowns tied to the coronavirus pandemic, Statistics Canada said on Friday. Analysts in a Reuters poll had forecast an increase of 24.5% in June. In a preliminary flash estimate, Statscan said July retail sales could rise by a more subdued 0.7%.

U.S. home sales rose at a record pace for a second straight month in July and home prices hit a record as historically low interest rates boosted demand for homes even as the coronavirus pandemic put millions of people out of work. The National Association of Realtors said on Friday existing home sales rose 24.7% to a seasonally adjusted annual rate of 5.86 million units last month. Data for June was revised down slightly to a 4.70 million unit pace from the originally reported 4.72 million.

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Data firm IHS Markit said its flash U.S. Composite PMI Index rose to a reading of 54.7 this month from 50.3 in July as companies in both the manufacturing and services sectors saw a resurgence in new orders.

With files from Reuters

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