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Equities
Canada’s main stock index fell in early trading Tuesday with a decline in crude prices weighing on energy shares. South of the border, the Dow and S&P 500 retreated from the previous session’s record levels on concerns over increased restrictions aimed at curbing the spread of the coronavirus.
At 9:37 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 113.62 points, or 0.67 per cent, at 16,776.19.
In the U.S., the Dow Jones Industrial Average fell 150.29 points, or 0.50 per cent, at the open to 29,800.15.
The S&P 500 opened lower by 16.60 points, or 0.46 per cent, at 3,610.31 and the Nasdaq Composite dropped 10.78 points, or 0.09 per cent, to 11,913.35 at the opening bell.
“Despite this unbridled optimism it is also impossible to ignore the current backdrop to the vaccine news, which is seeing a continuation in the trends of rising infection, hospitalization and mortality rates, across Europe and the U.S., with California being the latest U.S. state to pull an emergency brake on 41 of its counties, 94 per cent of its population,” Michael Hewson, chief market analyst with CMC Markets, said.
“The fact remains that for all the optimism over multiple vaccine candidates, none of them will be available to offset the problems currently being faced right now, as we head into a long dark winter of trying to keep a lid on the problems being faced in keeping the virus under control, until the weather warms up next year.”
On the corporate side, shares of Tesla Inc. were up nearly 12 per cent in premarket trading after it was announced late Monday that the electric car company would join the S&P 500 on Dec. 21. Due to Tesla’s unusually large market capitalization, S&P Dow Jones Indices said it would consult investors about whether the company should be added all at once or in two separate tranches.
In this country, Bank of Canada Governor Tiff Macklem will participate via videoconference in a panel discussion at the Public Policy Forum on the topic of sustainable finance and the transition to a low-carbon economy. Mr. Macklem’s remarks will be published on the central bank’s website at 2 p.m. ET.
In earnings, Loblaw-parent George Weston reported earnings per share of $1.96 on revenue of $16.209-billion. On adjusted basis, Weston reported earnings per share of $2.35. Analysts were expecting earnings per share of $2.19, according to IBES data from Refinitiv. Weston also says its quarterly dividend will be increased to 55 cents.
South of the border, Home Depot topped forecasts for sale-store sales as consumers stayed close to home during the coronavirus pandemic. Same-store sales rose 24.1 per cent in the third quarter ended Nov. 1, beating analysts' average estimate of a 14.8-per-cent increase. Home Depot also said it would spend about US$1-billion more annually on employees' compensation.
Walmart Inc, meanwhile, also posted a bigger-than-expected increase in quarterly same-store sales. Sales at U.S. stores open at least a year rose 6.4 per cent, excluding fuel, in the third quarter. Analysts had estimated an increase of 4.16per cent.
Wall Street also saw some downward pressure from a slightly weaker-than-forecast reading on retail sales. The U.S. Commerce Department said sales last month rose 0.3 per cent last month. Economists had been expecting an increase of 0.5 per cent. September’s gain was revised down to 1.6 per cent from an earlier estimate of 1.9 per cent.
Overseas, major European markets were down slightly in morning trading. The pan-European STOXX 600 fell 0.18 per cent. Britain’s FTSE 100 slid 0.49 per cent. Germany’s DAX fell 0.07 per cent while France’s CAC 40 was off 0.13 per cent.
In Asia, Japan’s Nikkei closed up 0.42 per cent. Hong Kong’s Hang Seng gained 0.13 per cent.
Commodities
Crude prices slid in morning trading as concerns over COVID-19 restrictions offsetting hopes that OPEC and its allies will extend current production cuts.
The day range on Brent is US$43.63 to US$44.25. The day range on West Texas Intermediate is US$41.12 to US$41.69. Crude prices gained on Monday after Moderna said its vaccine candidate was nearly 95-per-cent effective in trials.
On Tuesday, markets will be watching OPEC+ members, who are set to hold a ministerial committee committee meeting that could see the group recommend changes to production quotas at the organization’s broader meeting at the end of the month.
A Reuters report, citing sources, says the group is leaning toward postponing a planned January increase in production for at least three months. A separate report suggests that OPEC and its allies have revised oil demand scenarios for 2012, with demand weaker than expected.
“Oil continues to hold up as there is a strong vibe in the market that the JMMC (Joint Ministerial Monitoring Committee) will signal that OPEC + willingness to do what it takes to support oil prices while maintaining a unified front and will be perceived positive for the oil market,” Axi chief global market strategist Stephen Innes said.
“This month, the OPEC + meeting is a huge deal for the oil market with COVID ravaging the U.S. and EU economies,” he said.
Elsewhere, gold prices slid amid optimism over COVID-19 vaccine candidates.
Spot gold eased 0.1 per cent to US$1,886.83 per ounce, while U.S. gold futures were down 0.1 per cent to US$1,885.40.
“The optimism over a COVID-19 vaccine is dampening demand for the precious metal,” FXTM market analyst Han Tan said.
Currencies
The Canadian dollar was steady in early going as the U.S. dollar held near its lowest level against a basket of world currencies.
The day range on the loonie is 76.40 US cents to 76.54 US cents.
Ahead of the start of trading, Canada Mortgage and Housing Corp. said Canadian housing starts rose 3 per cent in October compared with the previous month. The seasonally adjusted annualized rate of housing starts rose to 214,875 units from a revised 208,715 units in September.
Statistics Canada, meanwhile, reported that wholesale sales in September rose 0.9 per cent to $66.2-billion and remained higher than February’s pre-COVID-19 levels for the third consecutive month.
On global markets, the euro last traded 0.2 per cent higher to the U.S. dollar at $1.18715.
Britain’s pound last traded 0.14 per cent higher at US$1.3218 and also edged up to 89.78 pence per euro, according to Reuters figures.
The U.S. dollar lost 0.3 per cent to trade at 104.30 yen. The U.S. dollar index against a basket of major currencies stood at 92.431, its lowest in over a week.
More company news
Amazon on Tuesday launched an online pharmacy for delivering prescription medications in the United States. Called Amazon Pharmacy, the new store lets customers price-compare as they buy drugs on the company’s website or app. Shoppers can toggle at checkout between their co-pay and a non-insurance option, heavily discounted for members of its loyalty club Prime.
Airbnb Inc’s initial public offering (IPO) registration showed on Monday that the home rental startup turned a profit in the third quarter despite the COVID-19 pandemic, as it gears up for one of the most anticipated stock market debuts in recent years. The filing, published ahead of Airbnb’s anticipated stock market debut in December, showed a dramatic recovery in its fortunes, after the coronavirus outbreak dragged down its core home rental business during the first half of the year.
Warren Buffett’s Berkshire Hathaway Inc said on Monday it has begun investing in the stocks of four large drugmakers. In a regulatory filing detailing its U.S.-listed investments as of Sept. 30, Berkshire disclosed new stakes in Abbvie Inc, Bristol-Myers Squibb Co and Merck & Co of more than US$1.8-billion each, and a new US$136 million stake in Pfizer Inc.
Economic news
(8:15 a.m. ET) Canadian housing starts for October.
(8:30 a.m. ET) Canada’s wholesale trade for September.
(8:30 a.m. ET) Canadian international securities transactions for September.
(8:30 a.m. ET) U.S. retail sales for October.
(9:15 a.m. ET) U.S. industrial production for October.
(10 a.m. ET) U.S. NAHB Housing Index for November.
(10 a.m. ET) U.S. business inventories for September.
(2 p.m. ET) Bank of Canada Governor Tiff Macklem speaks on “Sustainable Finance and the Transition to a Low-Carbon Economy” at the Public Policy Forum videoconference
With Reuters and The Canadian Press
Terry Weber