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Equities

Key indexes on both sides of the border started higher Monday on investor optimism over a potential COVID-19 vaccine after Moderna Inc. said trials showed its treatment was nearly 95-per-cent effective in preventing the illness.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 100.75 points, or 0.6%, at 16,776.39. Energy shares were up more than 4 per cent, buoyed by a jump in crude prices

The Dow Jones Industrial Average rose 192.55 points, or 0.65 per cent, at the open to 29,672.36.

The S&P 500 opened higher by 15.01 points, or 0.42 per cent, at 3,600.16, while the Nasdaq Composite gained 17.82 points, or 0.15 per cent, to 11,847.11 at the opening bell.

“The news on Moderna’s vaccine seems positive, both in terms of the 94.5-per-cent efficacy rate but also the news that the vaccine has a longer shelf life at refrigerated temperatures,” Axi chief market analyst Stephen Innes said.

“If confirmed that could make it easier to distribute, as some of the other vaccine candidates need to be stored at much lower temperatures.”

Last week, Pfizer Inc. jolted stocks with reports that its vaccine had proven 90-per-cent effective in trials. The news saw broad markets gain, although it also triggered a rotation out of tech stocks, which have benefitted from the stay-at-home trend.

Early Monday, Moderna Inc became the second U.S company to release data from a large study of its experimental vaccine, saying it was 94.5-per-cent effective against COVID-19. Moderna will seek emergency use authorization from the U.S. Food and Drug Administration once it has more safety data, expected later this month. Moderna shares were up more than 6 per cent in early trading.

In this country, the Canadian Real Estate Association says national existing home sales pulled back 0.7 per cent on a monthly basis in October from the previous month’s record levels. Year-over-year, sales were up 32.1 per cent, the association said.

On the corporate side, TSX-listed Endeavour Mining has agreed to buy Teranga Gold in an all-share deal. Endeavor shareholders will end up with 66-per-cent of the combined entity, with Teranga shareholders holding the remaining 34 per cent. Teranga will get three seats on the board to Endeavour’s seven. Endeavor will pay 0.470 of its own shares for each Teranga share, a 5.1 per cent premium based on Friday’s closing prices.

Overseas, the pan-European STOXX 600 was up 0.66 per cent in morning trading. Britain’s FTSE 100 gained 0.78 per cent. Germany’s DAX gained 0.61 per cent and France’s CAC 40 advanced 1.20 per cent.

In Asia, Japan’s Nikkei closed up 2.05 per cent. The Shanghai Composite Index was up 1 per cent. Hong Kong’s Hang Seng finished up 0.86 per cent.

Commodities

Crude prices gained in early going as investors weigh the possibility that OPEC and its allies will continue with current production curbs into the new year.

The day range on Brent is US$42.71 to US$43.80. The range on West Texas Intermediate is US$40.15 to US$41.24. Both benchmarks advanced by roughly 8 per cent last week, helped by market optimism over the latest vaccine headlines.

“I’d expect the final decision from OPEC+ later this month to continue to err on the side of caution and to focus on limiting the downside for oil,” Axi chief global market strategist Stephen Innes said.

He said an OPEC joint committee is scheduled to meet Monday ahead of the planned meeting at the end of the month.

“I’d be surprised if it [today’s meeting] wasn’t also used to gauge appetite for an extension of current OPEC+ cuts,” Mr. Innes said.

“Unofficial comments from unnamed OPEC officials have already emerged in the press, suggesting that an extension of current cuts by 3-6 months may be on the table.”

Prices also drew some support from figures out of China showing that refineries processed the most crude on record in October on a daily basis, suggesting a rebound in demand.

Gold prices, meanwhile, held near a one-week high as the U.S. dollar softened.

Spot gold was little changed at US$1,889.01 per ounce, having earlier hit its highest level since Nov. 9 at US$1,898.81.

U.S. gold futures were flat at US$1,886.70.

Currencies

The Canadian dollar was higher as its U.S. counterpart weakened against global currencies.

The day range on the loonie is 76.09 US cents to 76.39 US cents.

Ahead of the open, Statistics Canada said manufacturing sales in September rose 1.5 per cent to $53.8-billion. The agency says sales are now within 3.6 per cent of their pre-pandemic levels.

The week’s big releases will come later with the release of inflation numbers Wednesday and retail sales figures on Friday.

On global markets, the U.S. dollar index, which weighs the greenback against a group of global currencies, slid 0.2 per cent to 92.573.

The euro rose 0.3 per cent to a one-week high of US$1.1868 while currencies sensitive to global sentiment such as the Australian dollar saw solid gains, according to figures from Reuters.

Britain’s pound rose as high as US$1.3242 before settling at US$1.3219, up 0.1 per cent.

More company news

PNC Financial Services Group said Monday it is buying the U.S. subsidiary of Spain’s BBVA bank for US$11.6-billion in cash. BBVA’s U.S. operations, which are based in Houston, Texas, have $104 billion in assets and operate 637 branches, mainly in the south and southwest of the country. “Our acquisition of BBVA USA will accelerate our growth trajectory and drive long-term shareholder,” said William Demchak, PNC’s president, chairman and CEO.

Tyson Foods Inc beat quarterly sales estimates on Monday, as the largest U.S. meat processor benefited from consumers buying more of its beef and pork products during the COVID-19 pandemic. Tyson’s sales rose to $11.46-billion from $10.88-billion in the fourth quarter ended Oct. 3. Analysts on average had expected sales of $11.01-billion, Refinitiv data showed.

Economic news

(8:30 a.m. ET) Canada’s manufacturing sales and orders for September.

(8:30 a.m. ET) Canada’s new motor vehicle sales for September.

(8:30 a.m. ET) U.S. Empire State Manufacturing Survey for October.

(9 a.m. ET) Canada’s existing home sales and average prices for October.

(9 a.m. ET) Canada’s MLS Home Price Index for October.

With Reuters, The Canadian Press and The Associated Press

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