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Equities

Canada’s main stock index started higher Wednesday with higher gold prices bolstering mining shares. South of the border, Wall Street’s major indexes found their footing a day after U.S. President Donald Trump’s move to halt stimulus talks rattled investors.

At 9:40 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 128.13 points, or 0.79 per cent, at 16,364.26.

Materials stocks, which include miners, rose 1 per cent on the back of advancing gold prices. The energy sector gained 0.5 per cent even as crude prices declined.

In the U.S., the Dow Jones Industrial Average rose 198.60 points, or 0.72%, at the open to 27,971.36.

The S&P 500 opened higher by 23.61 points, or 0.70 per cent, at 3,384.56, while the Nasdaq Composite gained 117.07 points, or 1.05 per cent, to 11,271.68 at the opening bell.

On Tuesday, markets took a late-day turn after Mr. Trump tweeted that he was putting an end to talks for a new coronavirus relief package until after the November election.

“Markets bounced back fairly quickly and it [Mr. Trump’s announcement] is unlikely to be the catalyst for a significant sell-off as most market participants were not anticipating that a deal will be reached ahead of the U.S. presidential election anyway,” Milan Cutkovic, market analyst at AxiCorp, said, describing the initial market reaction as “knee jerk”.

“However, should there be no stimulus package announced shortly after the election, investors could get increasingly nervous about the economic recovery losing momentum.”

Mr. Trump’s tweet came just hours after Federal Reserve chair Jerome Powell cautioned that the tentative U.S. economic recovery could falter without further government stimulus.

“The expansion is still far from complete. Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses,” Mr. Powell said in a morning address.

On Wednesday afternoon, markets will get a chance to again gauge the Fed’s thinking when it releases the minutes from the last policy meeting.

Shares of Levi Strauss & Co spiked 8 per cent in early trading in New York after the company posted a surprise profit and beat revenue estimates as consumers shopped more online during the COVID-19 pandemic. Excluding certain items, Levi earned 8 US cents per share, while analysts on average had projected a loss of 22 US cents. The results were released after Tuesday’s close.

Elsewhere, The Globe’s Jeffrey Jones reports that Sandpiper Group has laid out plans to steer Artis Real Estate Investment Trust should it win a bid to replace most of the board, including cutting costs, increasing distributions to investors and halting business with a company connected to the chief executive’s family. Sandpiper is seeking unit-holder support for its proxy fight at Artis, which the Vancouver-based activist investor announced last week. It wants to replace five of the company’s trustees, including CEO Armin Martens, with its own nominees. It also wants Artis’s proposed spinoff of Western Canadian retail real estate assets into a new trust scrapped in favour of asset sales.

Overseas, major European markets remained mixed by afternoon with the pan-European STOXX slipping 0.23 per cent. Britain’s FTSE 100 was flat. Germany’s DAX and France’s CAC 40 fell 0.47 per cent and 0.27 per cent, respectively.

In Asia, Hong Kong’s Hang Seng finished up 1.09 per cent. Japan’s Nikkei slid 0.05 per cent. The broader Topix ended modestly higher.

Commodities

Crude prices were weaker, pressured by rising U.S. inventories and lingering concern about U.S. President Donald Trump’s decision to halt stimulus talks.

The day range on Brent is US$41.69 to US$42.42. The range on WTI is US$39.63 to US$40.35.

Sentiment took a hit after the American Petroleum Institute reported that U.S. oil inventories rose by 951,000 barrels last week.

“(This was) not exactly what the recovery doctor ordered as the oil market was already tanking from a two-week high after President Trump quashed hope for a pre-election stimulus deal,” Stephen Innes, chief market strategist, at online brokerage AxiCorp, said in a note.

More official weekly figures will be released later Wednesday morning by the U.S. Energy Information Administration.

Wednesday’s early losses were offset by the continued impact of Hurricane Delta on production in the Gulf of Mexico as companies removed workers and secured production platforms in preparation for the storm.

As well, in Norway, the Lederne labour union said on Tuesday it will expand its ongoing oil strike from Oct. 10 unless a wage deal can be reached in the meantime, according to a Reuters report. Six offshore oil and gas fields shut down on Monday because of the strike, cutting the country’s output capacity by 8 per cent, the news agency said.

In other commodities, gold prices rose on continued concern about the economic recovery.

Spot gold rose 1 per cent to US$1,895.46 per ounce. U.S. gold futures were down 0.4 per cent at US$1,901.60.

Currencies

The Canadian dollar was slightly firmer as the U.S. dollar steadied after rising in the wake of Mr. Trump’s decision to call off stimulus talks.

The day range on the loonie is 74.96 US cents to 75.25 US cents.

There were no major economic reports on Wednesday’s calendar. Investors will now be looking ahead to remarks by Bank of Canada Governor Tiff Macklem on Thursday morning and the release of the September employment figures early Friday.

In early trading in Europe, the U.S. dollar was last quoted at US$1.1754 per euro, down 0.18 per cent after a 0.4 per cent gain against the common currency during the previous session, according to figures from Reuters.

The greenback had jumped on Tuesday after Mr. Trump’s surprise announcement but later steadied as markets looked beyond the tweet and drew some solace from the U.S. President’s request that Congress extend US$25-billion in new payroll assistance to U.S. airlines.

The British pound was quoted at US$1.2915, up 0.36 per cent after losing 0.86 per cent on Tuesday. The Australian dollar edged up 0.57 per cent to US$0.7142 after tumbling by more than 1.1 per cent on Tuesday.

More company news

EU antitrust enforcers accepted on Wednesday Broadcom’s offer to drop exclusivity deals with TV and modem makers and ended their year-long investigation without a finding of wrongdoing by the U.S. chipmaker. The EU competition enforcer launched an investigation into the company in June last year and even threatened to issue an interim order, its first in almost two decades, to stop such practices while the probe was ongoing.

British private security company G4S on Wednesday once again rejected smaller Canadian rival GardaWorld’s offer and dismissed claims made by the hostile bidders in a pitch to shareholders as misleading. GardaWorld, which launched a hostile bid for one of the world’s largest private security companies G4S last month, said on Tuesday that it, along with its private equity owner BC Partners, had a plan to “address G4S' pension issues”.

German coalition parties have agreed on a reform package which is meant to improve oversight and reduce conflicts of interest following the Wirecard accounting scandal, a document obtained by Reuters showed on Wednesday. The government’s so-called Wirecard action plan gives Bafin watchdog increased control rights and requires companies to switch their accounting firms after 10 years, the document said.

Economic news

(10 a.m. ET) Canada’s Ivey Purchasing Managers Index for September.

(2 p.m. ET) U.S. Fed minutes released

(3 p.m. ET) U.S. consumer credit for August.

Also: U.S. vice-presidential debate

With Reuters and The Canadian Press

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