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Equities

Canada’s main stock index started lower Tuesday with crude prices sliding and fresh restrictions in some regions aimed at stemming the spread of the coronavirus weighing on sentiment. On Wall Street, indexes were moving sideways as markets wait the first U.S. presidential debate.

At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 36.47 points, or 0.22%, at 16,206.34.

In the U.S., the Dow Jones Industrial Average fell 23.82 points, or 0.09 per cent, at the open to 27,560.24. The S&P 500 opened lower by 0.68 points, or 0.02 per cent, at 3,350.92, while the Nasdaq Composite dropped 8.52 points, or 0.08 per cent, to 11,109.00 at the opening bell.

“Tuesday has seen a more cautious approach among investors, with little desire to drive markets higher after the impressive rebound seen since Friday,” Chris Beauchamp, chief market analyst at online trading firm IG, said. “This may well be just a pause for breath, since stimulus talk in Washington continues to provide a more positive foundation for markets after the uncertainty that prevailed in September.”

“The impending U.S. presidential debate is also providing an excuse for traders to sit on their hands, although the long-awaited confrontation is unlikely to provide more than lots of heat and not very much light,” he said.

U.S. House of Representatives Speaker Nancy Pelosi said on Monday that Democratic lawmakers unveiled a new, US$2.2-trillion coronavirus relief bill. In a letter to Democratic lawmakers released by Pelosi’s office, she said the legislation “includes new funding needed to avert catastrophe for schools, small businesses, restaurants, performance spaces, airline workers and others.”

Meanwhile, U.S. President Donald Trump and Democrat challenger Joe Biden are scheduled for their first debate ahead of the November election at 9 p.m. ET.

On the corporate side, Wall Street investors will get results from Micron Technology Inc. after the close of trading.

In this country, unionized workers at Ford Motor Co. ratified a three-year agreement with the automaker that will see electric vehicles made in Oakville, Ont. The Ford agreement, ratified by 81 per cent of votes cast, includes a 5-per-cent raise and productivity bonuses of $7,250. Under the old agreement, Ford’s production workers made $21 to $36 an hour, and skilled tradespeople were paid $42.

In Europe, the pan-European STOXX 600 was down 0.35 by afternoon. Britain’s FTSE 100 fell 0.54 per cent. Germany’s DAX and France’s CAC 40 fell 0.42 per cent and 0.18 per cent, respectively.

In Asia, Japan’s Nikkei edged up 0.12 per cent while Hong Kong’s Hang Seng ended down 0.85 per cent.

Commodities

Crude prices pulled back in early going as demand fears offset optimism over a potential new U.S. coronavirus stimulus package.

The day range on Brent so far is US$42.03 to US$42.52. The range on West Texas Intermediate is US$40.13 to US$40.70.

Prices got some support after U.S. Democrats unveiled a new US$2.2-trillion relief bill. House of Representatives Speaker Nancy Pelosi described the bill as a compromise measure.

“If it happens, the U.S. stimulus cheques will go a long way to shoring up U.S. oil demand at a most critical juncture and could move oil prices back into a pre-September frame of mind,” AxiCorp global market strategist Stephen Innes said in a note.

However, spiking coronavirus infections and fresh restrictions in some countries continue to cause concern over the rebound in demand. On Tuesday, the worldwide death toll from the coronavirus topped one million, nine months into the global health crisis.

“The presence of the coronavirus makes calling oil markets direction exponentially more uncertain than in regular times,” Mr. Innes said.

“The simultaneous fall in gold, inflation linkers, and equities last week suggest risk parity, and the overall correlation to energy may have contributed to the oil market selloff. With vaccine hope only 55-60 per cent priced, the rally is not over, just delayed.”

Later Tuesday investors will get the first of two weekly U.S. inventory reports and will be looking for signs of how demand is holding up. The American Petroleum Institute releases its tally later in the session, followed by more official numbers on Wednesday from the U.S. Energy Information Administration.

Five analysts polled by Reuters on average estimate U.S. crude oil inventories rose by 1.4 million barrels in the week to Sept. 25. They expect gasoline stockpiles fell by 1.6 million barrels and distillate inventories, which include diesel and jet fuel, fell by 800,000 barrels.

In other commodities, gold prices steadied.

Spot gold was little changed at US$1,881.59 per ounce, after gaining 1.1 per cent in the previous session, its biggest one-day gain since late August.

U.S. gold futures were up 0.2 per cent at US$1,886.60.

Currencies

The Canadian dollar edged higher as its U.S. counterpart held near its best level in two months.

The day range on the loonie was 74.67 US cents to 74.87 US cents.

“Overnight markets have been quiet,” RBC chief currency strategist Adam Cole said.

There were no major Canadian releases on the economic calendar.

On world markets, the U.S. dollar index edged up 0.1 per cent to 94.265. It held steady during a quiet Asian session but picked up as European markets opened, according to Reuters.

Riskier currencies held firm with the New Zealand dollar steady at 0.656 versus the dollar and the Australian dollar up 0.2 per cent on the day at 0.70845.

The yen was little changed against the U.S. dollar at 105.580. The euro was steady at $1.16745, up 0.1 per cent on the day .

More company news

Japan’s Nippon Telegraph and Telephone Corp (NTT) said it will spend 4.25 trillion yen (US$40-billion) to take its wireless carrier business private, in a deal that opens the path to lower prices as the government calls for cuts. NTT will launch Japan’s largest-ever tender offer for the 34 per cent of NTT Docomo Inc stock that it does not own, the firm said in a statement. The telecoms firm will offer 3,900 yen per share, a premium of 40.5 per cent to Monday’s closing price.

Alphabet unit Google has offered concessions for a second time in a bid to address EU antitrust regulators' concerns about its bid for fitness tracker maker Fitbit, a European Commission filing showed on Tuesday. The Commission, which is scheduled to decide on the deal by Dec. 23, did not publish details of the concessions in line with its policy.

Tiffany & Co said on Tuesday LVMH’s countersuit to drop its US$16-billion bid for the U.S. jeweler was just an attempt to evade paying the full purchase price. Tiffany said LVMH had still not provided it or the court with a copy of the letter from the French government that prohibited the acquisition prior to its scheduled date.

Nokia has clinched a deal with Britain’s biggest mobile operator BT to supply 5G radio equipment, the Finnish company said on Tuesday, in one of the first major wins under new CEO Pekka Lundmark. The deal will make Nokia BT’s largest equipment provider and comes just months after Britain said it would ban China’s Huawei Technologies from next-generation 5G telecom networks. The size of the contract was not disclosed.

Molson Coors Beverage Co said on Tuesday that it partnered with Coca-Cola Co to make and sell an alcoholic version of the beverage company’s Topo Chico sparkling water in the United States. The U.S. launch of the hard seltzer version will help Coca-Cola push further into alcoholic drinks and expand its market beyond Latin America and Japan, where it sells Lemon-Do drink.

Economic news

(8:30 a.m. ET) Canada’s industrial product and raw materials price indexes for August.

(8:30 a.m. ET) U.S. wholesale and retail inventories report for August.

(9 a.m. ET) U.S. S&P Case-Shiller Home Price Index for July.

(10 a.m. ET) U.S. Conference Board Consumer Confident Index for September.

(9 p.m. ET) First U.S. presidential debate

With Reuters and The Canadian Press