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Equities

Canada’s main stock index gained early Tuesday alongside world markets, with rising crude prices boosting energy shares. In the U.S. major indexes were also positive after the formal go-ahead was given for President-elect Joe Biden’s transition.

Just after the opening bell, the Toronto Stock Exchange’s S&P/TSX composite index was up 101.03 points, or 0.59 per cent, at 17,195.56.

On Wall Street, the Dow Jones Industrial Average rose 154.84 points, or 0.52 per cent, at the open to 29,746.11.

The S&P 500 opened higher by 16.93 points, or 0.47 per cent, at 3,594.52, while the Nasdaq Composite gained 58.70 points, or 0.49 per cent, to 11,939.33 at the opening bell.

Late Wednesday, the U.S. General Services Administration, after weeks of delay, told Mr. Biden that funds would be made available for the transition. Despite the decision, U.S. President Donald Trump continued to concede defeat.

Markets also drew support from reports that Mr. Biden plans to nominate former Federal Reserve chair Janet Yellen to become the next Treasury Secretary. Ms. Yellen is expected to take a more pragmatic approach to the post, focusing on fixing the economy as it grapples with the impact of the COVID-19 pandemic.

“Signs of movement in the U.S. political deadlock have combined with the steady drip of vaccine news to underpin a market that has yet to breach the highs seen earlier in the month,” Chris Beauchamp, chief market analyst with IG, said.

“But the trickle of good news stories has helped to hold markets near to those highs, leaving them well-placed to push higher into December.”

In this country, Finance Minister Chrystia Freeland announced Monday that the federal government will release its fall economic statement on Nov. 30, offering the first look at the fiscal account since the fiscal snapshot released in July, which projected a $343-billion deficit, BMO economist Shelly Kaushik said in a morning note.

“We’ll get some idea of how FY 20/21 is shaping up with Friday’s release of the Fiscal Monitor, which will show us where the deficit stands at the halfway mark of the year,” she said.

On the corporate side, the Globe reports that Telus Corp. has launched a $100-million fund to back enterprises aiming to sell “socially responsible” products and services. The Vancouver telecommunications giant is setting up the Telus Pollinator Fund to invest in for-profit companies building digital products to help improve health care, as well as those that support “social and economic inclusion,” sustainable agriculture and reducing humanity’s environmental footprint.

On the earnings front, Quebec-based convenience store operator Alimentation Couche-Tard Inc. will release results after the close of trading.

On Wall Street, Best Buy shares fell more than 6 per cent in early trading after the retailer reported comparable sales in the latest quarter ahead of analysts’ estimates but held off issuing a forecast for the critical holiday quarter.

Retailers Gap and Nordstrom announce their latest results after the close.

Overseas, the pan-European STOXX 600 was up 0.64 per cent in early trading with nearly all sectors above water. Britain’s FTSE 100 rose 1.18 per cent. Germany’s DAX gained 1.03 per cent and France’s CAC 40 was up 1.38 per cent.

In Asia, Japan’s Nikkei jumped 2.5 per cent. Hong Kong’s Hang Seng gained 0.30 per cent.

Commodities

Crude prices gained, with Brent hitting its best level since March, on optimism over a potential COVID-19 vaccine and expectations that OPEC and its allies will delay production increases.

The day range on Brent is US$45.89 to US$46.72. The range on West Texas Intermediate is US$42.82 to US$43.74. The upper end of the spread on Brent represents the highest level since early March.

Both benchmarks were up more than 1 per cent in early going.

“With OPEC+ due to meet on Monday, where they will almost certainly expend the production cut targets, oil prices should remain broadly supported,” OANDA senior analyst Jeffrey Halley said.

“As is the wont of OPEC+, nothing can be taken for granted, and if they break ranks, an ugly correction lower will ensue.”

The OPEC+ group is now scheduled to increase output in January under its current deal to bolster the market. However, traders are expecting the group to delay that move in response to the impact of the pandemic on demand.

“The arrival of three commercially viable COVID-19 vaccines is changing the picture for the world in 2021, and with momentum so strong, it would be foolish to say the rally in oil prices is near an end,” Mr. Halley said in an early note.

“I also remain confident that not even OPEC+ would shoot themselves in the foot next week.”

Later in the session, markets will get the first of two weekly U.S. inventory reports, with the release of numbers from the American Petroleum Institute. Forecasts suggest crude stocks will see a modest decline.

Gold prices, meanwhile, slid to their lowest level in four months, extending the previous session’s declines.

Spot gold was down 0.7 per cent at US$1,823.58 per ounce after sliding to its lowest since July 21 at US$1,820.45. Gold fell as much as 2.2 per cent on Monday.

U.S. gold futures dipped 0.9% to $1,820.60.

“We had news about the vaccine, saw yields moving higher in U.S., even the [U.S.] dollar went lower and gold is not profiting from that ... This is a very bad sign for gold and means there is an underlying weakness building up,” ABN Amro analyst Georgette Boele said.

Currencies

The Canadian dollar rose in early going as risk sentiment improved and the U.S. dollar slid against a basket of currencies on news that the formal transition to U.S. President-elect Joe Biden can proceed.

The day range on the loonie is 76.42 US cents to 76.85 US cents.

“Positive risk sentiment has persisted,” Alvin Tan, Asia FX strategist with RBC, said.

Ahead of the open, Statistics Canada said it’s early ‘flash’ estimate of manufacturing sales in October is a gain of 0.6 per cent. If the estimate holds, it would follow an increase of 1.5 per cent in September.

On global markets, risk-oriented currencies benefited from news out of Washington, including both the start of the formal transition of power and the expectation of Janet Yellen being named Secretary Treasury.

Against a basket of other major currencies, the U.S. dollar slid 0.12 per cent to 92.396, hovering just above a near three-month low of 92.013 hit on Monday.

The Australian dollar gained 0.4 per cent to US$0.7313 while the euro rose 0.1 per cent at US$1.1852. New Zeland’s dollar rose 0.9 per cent to a two-year high of US$0.6985, according to figures from Reuters.

More company news

Suncor Energy Inc. is set to take over operation of Syncrude Canada Ltd., one of the country’s largest oil sands projects, in the latest example of consolidation in Alberta’s pandemic-ravaged oil sector, The Globe’s Emma Graney reports. Syncrude is a joint venture between Suncor, Imperial Oil Resources Ltd., Sinopec Oil Sands Partnership and CNOOC Oil Sands Canada. Despite the fact it’s owned by oil industry heavyweights, the mine itself is operated by Syncrude’s separate governance structure. That will all change by the end of 2021, when Suncor takes over operation of the mine, the Calgary-based company announced Monday evening.

Loral Space & Communications Inc. has signed a deal with the Public Sector Pension Investment Board and Telesat Canada to combine Loral and Telesat into a new public company. Loral holds a 62.7-per-cent economic interest Telesat Canada, an operator of telecommunications and direct broadcast satellites. Under the plan, Loral shareholders, together with PSP Investments and certain current and former management shareholders of Telesat will own the new company in approximately the same proportion as their current, indirect ownership in Telesat.

Tiffany & Co, which is being bought by French luxury giant LVMH, reported a smaller-than-expected decline in quarterly revenue on Tuesday as the U.S. jeweler benefited from strong sales in China and a recovery in demand at home. The U.S. luxury firm’s net sales fell about 1 per cent to US$1.01-billion in the third quarter ended Oct.31, beating expectations of US$980.71-million, according to IBES data from Refinitiv.

Economic news

(9 a.m. ET) U.S. S&P Case-Shiller Home Price Index for September.

(9 a.m. ET) U.S. FHFA House Price Index for September and Q3.

(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for November.

(12:45 p.m. ET) Bank of Canada Senior Deputy Governor Carolyn Wilkins moderates a videoconference panel on “New Policy Frameworks for a Lower-for-Longer World” for the IMF

With Reuters and The Canadian Press

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