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Equities

Canada’s main stock index started higher Tuesday with financial and energy stocks gaining. South of the border, major indexes saw a mixed start with the Dow climbing but the S&P 500 and the Nasdaq falling as investor enthusiasm over the latest vaccine news subsided.

At 9:48 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 36.65 points, or 0.22%, at 16,512.51.

Financial shares were up 0.8 per cent. Energy stocks advanced 0.6 per cent.

On Wall Street, the Dow Jones Industrial Average rose 96.20 points, or 0.33 per cent, at the open to 29,254.17.

The S&P 500 opened lower by 7.24 points, or 0.20 per cent, at 3,543.26, while the Nasdaq Composite dropped 91.34 points, or 0.78 per cent, to 11,622.44 at the opening bell.

“The vaccine trial data still needs to be parsed, and as WHO Special Envoy David Nabarro stated yesterday, last stage assessments will still be key in determining whether the vaccine obtains final approval,” CMC chief markets analyst Michael Hewson said.

“Even then people will still have to continue adopting the current measures of face masks, social distancing and washing hands, which will still need to be undertaken for months to come, given the logistical challenge of rolling the vaccine out in sufficient quantities to start making a difference.”

On the corporate side, Canadian investors continue to get earnings.

CAE Inc. said early Tuesday its net loss attributable to shareholders was $5.2 million, or 2 cents per share, in the second quarter ended Sept. 30, compared with a profit of $73.8-million, or 28 cents per share, a year earlier. The latest quarter was affected by the impact of COVID-19 on the market for flight simulators.

On Wall Street, shares of Beyond Meat were down about 22 per cent in early trading after the company reported an unexpected quarterly loss and lower-than-forecast sales, hit by weaker demand for its plant-based meat product at restaurants and retail stores after a surge at the start of the pandemic. Reuters reports that Beyond Meat sales grew at the slowest pace since the company went public last year. Shares were also hit by news that McDonald’s Inc. was developing its own meat substitute for its menu. Meanwhile, Pizza Hut on Tuesday launched two pizzas with Beyond Meat’s sausage in the United States and the United Kingdom for a limited time.

Overseas, Europe’s major markets were higher after a choppy start. The pan-European STOXX 600 was last up 0.47 per cent with bank stocks gaining but tech stocks weighing on sentiment. Germany’s DAX was just above break even while France’s CAC 40 added 0.98 per cent. Britain’s FTSE gained 1.29 per cent.

In Asia, Japan’s Nikkei finished the session up 0.26 per cent. The Shanghai Composite Index slid 0.40 per cent. Hong Kong’s Hang Seng rose 1.10 per cent.

Commodities

Crude prices managed modest gains as optimism over a COVID-19 vaccine helped offset demand concerns in the immediate future as governments continue to impose restrictions to curb the spread of the virus.

The day range on Brent is US$41.71 to US$43.29. The range on West Texas Intermediate is US$39.41 to US$41.02.

On Monday, both benchmarks jumped by 8 per cent, posting their biggest gains in five months.

“Unquestionably the vaccine will be a game-changer for the oil complex,” Axi chief market strategist Stephen Innes said.

“Still the pandemic matters most for near-term concerns. As with the case for all commodities, oil is priced on the spot markets, so markets are still exposed to the virus.”

In addition to the vaccine headlines, crude also got a lift from comments from Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman that OPEC+ cuts could be expended to 2022, he said.

“At a minimum, oil has not one but two price planks that should hold the floor upon oil prices while investors wait for the vaccine to get rolled out,” Mr. Innes said.

Later Tuesday, markets will also get U.S. oil inventory numbers from the American Petroleum Institute. A second weekly report from the Energy Information Administration follows on Wednesday.

Five analysts polled by Reuters estimated, on average, that U.S. crude stockpiles fell by 1.3 million barrels in the week to Nov. 6.

In other commodities, gold prices recouped some of Monday’s losses.

Spot gold rose 1.4 per cent to US$1,888.51 per ounce, while U.S. gold futures were 1.7-per-cent lower at US$1,886.40. Prices fell as much as 5 per cent on Monday as investors reacted to news that trials showed Pfizer’s experimental COVID-19 vaccine was more than 90 per cent effective.

“There remains major doubts over the timeline of the vaccine’s global rollout and its true efficacy and such doubts may keep gold prices supported until there is more clarity,” said FXTM market analyst Han Tan.

Currencies

The Canadian dollar was down slightly in early going, trading below 77 US cents, while the U.S. dollar was little changed against global counterparts.

The day range on the loonie is 76.77 US cents to 76.94 US cents. The Canadian dollar vaulted to its best levels in two years on Monday, fuelled by rising risk appetite on the back of positive vaccine news.

There were no major Canadian economic releases on Tuesday’s calendar.

“The fact that the CAD is down, if only modestly, on the session so far, suggests markets are recalibrating after yesterday’s failed CAD rally,” Shaun Osborne, chief FX strategist with Scotiabank, said. “With little on the domestic data front this week, positioning, sentiment and flows are set to remain the key drivers of the CAD.”

On global markets, the U.S. dollar index was at 92.730, broadly flat on the day and up around 0.3 per cent since Pfizer’s announcement on Monday, according to figures from Reuters.

Euro-dollar was up around 0.1 per cent at US$1.18315, having fallen as the U.S. dollar strengthened in the previous session. The Australian dollar - often viewed as a proxy for risk appetite - edged up 0.1 per cent versus the U.S. dollar.

More company news

EU antitrust regulators on Tuesday charged U.S. retail giant Amazon with distorting competition in online retail markets and also opened a second investigation into its e-commerce business practices. “The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon’s own retail business, which directly competes with those third party sellers,” the European Commission said in a statement.

The U.S. Federal Aviation Administration is in the final stages of reviewing proposed changes to Boeing Co’s 737 MAX and expects to complete the process in the “coming days,” the agency’s chief told Reuters. Three sources briefed on the matter told Reuters the FAA is set to lift its grounding order on the plane as early as Nov 18.

Apple Inc on Tuesday is expected to introduce Mac computers with its own processor chips, marking the start of its move away from Intel Corp’s chips. Apple said in June that it would begin outfitting Macs with its own chips, which will build on its decade-long history of designing processors for its iPhones, iPads and Apple Watches.

Economic news

(10 a.m. ET) U.S. Job Openings and Labor Turnover Survey for September.

With Reuters and The Canadian Press

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