Equities
Canada’s main stock index opened higher Monday with energy shares gaining as crude prices jumped. South of the border, Wall Street’s main indexes also gained as investors awaited further news on the health of U.S. President Donald Trump.
At 9:31 a.m., the Toronto Stock Exchange’s S&P/TSX composite index was up 80.45 points, or 0.5 per cent, at 16,279.7.
The Dow Jones Industrial Average rose 142.61 points, or 0.52 per cent, at the open to 27,825.42. The S&P 500 opened higher by 18.83 points, or 0.56 per cent, at 3,367.27, while the Nasdaq Composite gained 94.09 points, or 0.85 per cent, to 11,169.11 at the opening bell.
“Market sentiment has improved over the weekend following reports that U.S. President Trump´s condition is improving and that he might return to the White House as early as today,” AxiCorp market strategist Milan Cutkovic said.
“Nevertheless, uncertainty remains as Trump received aggressive and experimental coronavirus treatment, which suggests his condition might have been worse than previously admitted.”
Mr. Trump was flown to a hospital for treatment on Friday for COVID-19, but his doctors said he had responded well and could return to the White House as soon as on Monday. However, some also raised concerns over news that the the U.S. president was receiving a steroid treatment recommended for severe cases.
Meanwhile, markets also continue to weigh moves in some regions around the world to tighten restrictions to stem the spread of the coronavirus.
New York City will move to impose new shutdowns in some areas in response to a rise in the number of infections. Mayor Bill de Blasio said over the weekend that New York will reverse its reopening in nine neighbourhoods in Brooklyn and Queens starting Wednesday. Nonessential businesses in the area would be closed and schools in the areas would return to remote learning.
In Europe, the French government announced new restrictions, closing bars for two weeks. Other countries across Europe are also weighing up more measures.
On the corporate side, U.K.-based Cineworld said it will close all of its U.K. and U.S. movie theaters this week, leaving as many as 45,000 workers unemployed for the foreseeable future. The world’s second-biggest cinema chain cited the reluctance of studios to push ahead with major releases such as the new James Bond film for the decision.
Overseas, the pan-European STOXX 600 rose 0.61 per cent in morning trading with oil and gas and bank stocks among the winners. Britain’s FTSE 100 rose 0.48 per cent. Germany’s DAX advanced 0.61 per cent and France’s CAC 40 added 0.81 per cent.
In Asia, Hong Kong’s Hang Seng ended up 1.32 per cent. Japan’s Nikkei gained 1.23 per cent. Markets in China were closed for a public holiday.
Commodities
Crude prices rebounded after the previous session’s sharp drop, buoyed by optimism over the health of the U.S. president and the impact a strike in Norway.
The day range on Brent is US$39.14 to US$40.33. The range on West Texas Intermediate is US$37 to US$38.18.
Both benchmarks fell roughly 4 per cent on Friday amid news that U.S. President Donald Trump had been diagnosed with COVID-19. However, by Monday prices had recovered some of those losses, trading gains in the broader market on positive headlines regarding his recovery.
Prices also drew some support from a workers strike in Norway that has shut four of Equinor’s oil and gas fields. The strike could reduce the country’s production capacity by as much as 330,000 barrels of oil equivalent per day (boepd) or 8 per cent of its total output, according to the Norwegian Oil and Gas Association.
“The oil market has reversed a bit of Friday’s predictable response to the uncertainty brought about by news the U.S. president had tested positive for coronavirus but struggled to make higher ground above WTI US$38 so far as COVID resurgence continues and could remain the ultimate near-term rally capper,” AxiCorp chief global market strategist Stephen Innes said.
In other commodities, gold prices slid in early going.
Spot gold fell 0.5 per cent to US$1,889.56 per ounce. U.S. gold futures were down 0.8 per cent at US$1,892.80.
Currencies
The Canadian dollar advanced as crude prices firmed and risk sentiment improved on global markets.
The day range on the loonie was 75.17 US cents to 75.38 US cents.
There were no major economic reports on Monday’s calendar. On Tuesday, markets will get international trade figures for August. On Friday, Canadian employment numbers for September will be released.
“Firmer crude oil is a help for the CAD but sentiment remains highly dependent on the broader risk backdrop in the short run and the CAD may also be susceptible to disappointing jobs data later this week if there are signs of a second wave slowing September job gains (consensus expectations centre on a rise of 125,000, about half the 245,000 gain seen in Aug),” Shaun Osborne, chief currency strategist with Scotiabank, said in an early note.
On world markets, the U.S. dollar index, which weighs the greenback against a group of global currencies, slid slightly but still held close to recent ranges, falling less than 0.1 per cent on the day at 93.785.
U.S. dollar-yen rose 0.3 per cent to 105.615, recovering from its sharpest fall in more than a month on Friday, according to figures from Reuters.
Riskier currencies strengthened overnight but these gains faded by the time European markets opened. The Australian dollar was up 0.2 per cent at 0.71735, while the New Zealand dollar was down 0.1 per cent at 0.6641.
The euro edged up 0.1 per cent at US$1.17260.
More company news
Wilks Brothers LLC on Monday raised their hostile offer for Canadian oilfield services provider Calfrac Well Services Ltd to between $0.18 per share and $0.25 per share. Wilks Brothers had earlier offered a fixed $0.18 per share to Calfrac shareholders, rivaling a recapitalization bid from Calfrac’s management aimed at reducing the company’s massive debt.
TC Energy Corp. said it has made an offer to buy all the outstanding shares of TC Piplines LP that it doesn’t already own. Under the proposal, TC Pipelines share holders would receive 0.650 common shares of TC Energy for each TCP common unit, for an implied value of US$27.31 per common unit.
U.S. drugmaker Bristol Myers Squibb Co said on Monday it would buy MyoKardia Inc for about US$13-billion to expand its heart drugs business and reduce its dependence on cancer treatments. Bristol Myers will pay US$225 per share in cash, a 61.2-per-cent premium to MyoKardia’s Friday closing price.
Italy’s biggest payments firm Nexi on Monday announced a long-awaited merger with rival SIA to create a group with US$2-billion in annual revenue that looks to expand further in Europe. Nexi and SIA have been in merger talks for more than a year-and-a-half to create a payments firm whose domestic market share Jefferies has estimated at around 70 per cent. Differences over valuation and governance had held back a deal.
Indonesia’s government is in early discussions with electric vehicles maker Tesla Inc about a potential investment in the Southeast Asia country, a major producer of nickel, an official said. Indonesia is keen to develop a full supply chain for nickel at home, especially for extracting battery chemicals, making batteries and eventually building EVs.
Economic news
Japan, U.K. and Euro zone services and composite PMI
(10 a.m. ET) U.S. ISM Services PMI for September.
With Reuters and The Canadian Press
Terry Weber