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Equities
Positive vaccine news lifted shares on both sides of the border early Monday with energy stocks also helping boost Canada’s main stock index.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 48.15 points, or 0.28 per cent, at 17,067.25.
In the U.S., the Dow Jones Industrial Average rose 69.34 points, or 0.24 per cent, at the open to 29,332.82.
The S&P 500 opened higher by 9.28 points, or 0.26 per cent, at 3,566.82, while the Nasdaq Composite gained 61.79 points, or 0.52 per cent, to 11,916.76 at the opening bell.
Early Monday, Britain’s AstraZeneca said its vaccine, developed by Oxford University, was 90 per cent effective in preventing COVID-19 when it was administered as a half dose followed by a full dose at least one month apart, according to data from the late-stage trials. The vaccine’s effectiveness depended on the dosing, and fell to just 62 per cent when given as two full doses rather than a half-dose first, according to a Reuters report.
“While the potential for vaccines to start in a matter of weeks is a reason to celebrate, the reality is that there is currently no logistical process in place for this to happen quickly,” Michael Hewson, chief market analsyst with CMC Markets, said in an early note.
“Furthermore, U.S. COVID cases are still rising rapidly with millions of Americans set to find this week’s Thanksgiving break severely disrupted due to various state travel restrictions.”
Over the weekend, the number of U.S. COVID cases topped 12 million. Early sentiment was also tempered by disappointing economic news out of Europe. Euro zone business activity contracted sharply this month, hit by renewed restrictions aimed at stemming the spread of the virus. IHS Markit’s flash composite PMI fell to 45.1 in November from October’s 50.0 - the level separating growth from contraction. A Reuters poll had predicted a shallower dip to 46.1.
In this country, Obsidian Energy shareholders will vote on a proposed hostile takeover of Bonterra Energy Corp. Advisory firm Glass Lewis says the deal would be good for Obsidian shareholders but it has “almost no practical likelihood of being successful” because of opposition by Bonterra’s board and from more than 30 per cent of the company’s shareholders.
Bank of Canada deputy governor Toni Gravelle is scheduled to speak to the Autorite des marches financiers on the risks to the Canadian financial system, including those stemming from the COVID-19 pandemic. The speech is scheduled for 2 p.m. ET.
Overseas, the pan-European STOXX 600 was up 0.17 per cent by afternoon, giving back some early gains. Britain’s FTSE 100 was flat. Germany’s DAX rose 0.60 per cent and France’s CAC 40 advanced 0.47 per cent.
In Asia, the Shanghai Composite Index rose 1.09 per cent. Hong Kong’s Hang Seng finished up 0.13 per cent. Markets in Japan were closed.
Commodities
Crude prices added to the previous week’s gains, buoyed by the latest positive vaccine headlines.
The day range on Brent is US$44.89 to US$46.08. The range on West Texas Intermediate is US$42.29 to US$43.36. Both benchmarks gained about 5 per cent last week.
“Markets seem to be charging ahead, betting on the bullish trifecta of early vaccine rollouts, OPEC quota extension, and a weaker USD,” Axi chief market analyst Stephen Innes said.
OPEC and its allies meet later this month and markets are increasingly betting that the group won’t raise production as planned in January as the market contends with recent COVID-19 restrictions around the globe. The two-day OPEC meeting is scheduled to start on Sunday.
Mr. Innes said the markets were also helped by news Friday that U.S. rig count figures showed a surprise decline.
“Traded volumes will be concentrated into the first half of this week given U.S. Thanksgiving on Thursday, and the market appears to be anticipating a delay to the OPEC+ quota rise beyond Jan. 1, 2021, when the producers meet on Sunday/Monday, seeking to bridge a challenging northern hemisphere winter to the expected rollout of vaccines,” Mr. Innes said.
Meanwhile, gold prices slid.
Spot gold edged 0.1-per-cent lower to US$1,868.26 per ounce and U.S. gold futures fell 0.3 per cent to US$1,866.80.
“The fact that we have three vaccine results that are extremely positive is keeping gold under pressure in the near term and also stopping it from any kind of significant rebound,” said OANDA analyst Craig Erlam.
Currencies
The Canadian dollar was higher as its U.S. counterpart slid against global currencies amid improved risk sentiment on the back of the latest vaccine news.
The day range on the loonie is 76.37 US cents to 76.65 US cents. The dollar was last near the upper end of that spread.
There were no major Canadian economic releases on Monday’s calendar.
“While the CAD remains well and truly hitched to the broader risk sentiment wagon at the moment (as does the broader FX complex, it has to be said), crude prices pushing above US$43/bbl to the highest level in 3 months is not hurting the CAD’s cause at the moment,” Shaun Osborne, chief FX strategist with Scotiabank, said.
On global markets, the U.S. dollar index, which weighs the greenback against a basket of world currencies, slid 0.1 per cent to 92.234. The index fell about 0.4 per cent last week.
The U.S. dollar also lost out to the yen, with the pair changing hands at 103.76. Both the Australian dollar and the New Zealand dollar were up about 0.4 per cent against the greenback, according to figures from Reuters.
The euro edged up to US$1.1868.
More company news
Sherritt International Corp. says CEO David Pathe will step down from the role in 2012. Sherritt said Mr. Pathe has informed the board of his decision and has agreed to stay in the role until a replacement is in place.
Boralex Inc. has signed a deal to buy controlling interests in seven solar power plants in the United States from Centaurus Renewable Energy LLC and other investors for $283-million. The deal includes five solar plants in California, one in Alabama and one in Indiana.
The Globe reports that Telus Corp. plans to move entirely away from Huawei Technologies Co. Ltd. as a supplier of gear for superfast 5G mobile networks. It says instead that it will rely solely on telecom manufacturers from Western countries, as well as South Korea, because it expects Ottawa will eventually restrict the use of the Chinese company’s equipment in Canada. Telus is the last of Canada’s three major telecoms to make a business decision to shelve Huawei as its supplier of next-generation mobile 5G technology.
Britain’s competition regulator said on Monday it had received a complaint about Google related to its market study this year on online platforms and digital advertising. The complaint from a coalition of technology and publishing called Marketers for an Open Web (MOW) said they wanted the Competition and Markets Authority (CMA) to delay the launch of Google’s so-called Privacy Sandbox technology.
Economic news
(8:30 a.m. ET) Canada’s wholesale trade for October.
(9:45 a.m. ET) U.S. Markit manufacturing PMI for November.
(2 p.m. ET) Bank of Canada Deputy Governor Toni Gravelle speaks on “Assessment of risks to the stability of the Canadian financial system, including risks stemming from the COVID-19 pandemic” to Autorité des marchés financiers
With Reuters and The Canadian Press
Terry Weber