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Equities

Markets on both sides of the border started flat Wednesday as investors paused in the wake of a record rally and looked ahead to the start of earnings season to offer direction.

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At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 15.42 points, or 0.09 per cent, at 18,001.22.

In the U.S., the Dow Jones Industrial Average rose 16.2 points, or 0.05 per cent, at the open to 31084.88. The S&P 500 rose 1.0 points, or 0.03 per cent, at the open to 3802.23, while the Nasdaq Composite rose 15.6 points, or 0.12 per cent, to 13088.012 at the opening bell.

“There is a lack of catalysts, and investors are waiting for the U.S. earnings season to begin, which will hopefully help stocks gain momentum again,” Axi market analyst Milan Cutkovic said.

“Another highlight will be President-elect Joe Biden´s proposals for another massive stimulus package, which should be released tomorrow.”

Meanwhile, events in Washington continue to pull focus. On Tuesday, Congress approved a resolution calling on U.S. Vice-President Mike Pence and cabinet to remove President Donald Trump from office in response to last week’s riots in Washington. Ahead of that vote, however, Mr. Pence said he wouldn’t take such action, setting up a vote on Wednesday to impeach Mr. Trump.

“Although the House will likely vote to impeach President Trump today, the Senate (where impeachment would need a two thirds majority) is not scheduled to convene until January 19, the day before [President-elect Joe] Biden’s inauguration,” RBC chief currency strategist Adam Cole said.

“In the unlikely event that the Senate supports impeachment, it would be after his term has already ended. Tomorrow’s fiscal plans from President-elect Biden have greater immediate implications for markets.”

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On the corporate side, Canadian earnings continue to trickle.

Ahead of the start of trading, Calgary-based Shaw Communications reported that it had $1.37-billion in revenue for the three months ended Nov. 30, 2020, down 0.9 per cent from a year ago when it reported $1.38-billion in revenue. Its first-quarter profit came to $163-million, up 0.6 per cent from $162-million a year ago. The quarterly earnings amounted to 31 cents per basic and diluted share, unchanged from a year ago.

The Globe’s Alexandra Posadzki reports that analysts had been expecting $1.38-billion in revenue and earnings of 32 cents per share, according to the consensus estimate from S&P Capital IQ.

Retailer Aritzia reports after the close.

South of the border, Alphabet Inc.’s YouTube suspended Mr. Trump’s channel for at least a week, marking the latest online platform to limit the president’s activities.

YouTube said in a tweet that it suspended Mr. Trump’s channel after new content was uploaded that violated its policies. It did not specify which videos were in question or how they were in violation, according to The Associated Press.

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Markets will also get the Federal Reserve’s Beige Book at 2 p.m. In addition, four Fed speakers are scheduled to deliver remarks on Wednesday.

Overseas, major European markets were down slightly by afternoon.

The pan-European STOXX 600 was just below break even. Germany’s DAX and France’s CAC 40 rose 0.08 per cent and 0.19 per cent, respectively.

In Asia, Japan’s Nikkei ended up 1.04 per cent. Hong Kong’s Hang Seng slid 0.24 per cent.

Commodities

Crude prices edged higher, continuing the latest run of gains, after new industry figures showed a bigger-than-expected drop in U.S. crude inventories.

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The day range on Brent is US$56.63 to US$57.42. The range on West Texas Intermediate is US$53.26 to US$53.93. WTI is now higher for a seventh consecutive day.

On Tuesday, Brent added 1.7 per cent while WTI gained almost 2 per cent. Both are trading at their highest levels since February.

The latest gains came after the American Petroleum Institute reported that U.S. oil stocks fell by 5.8 million barrels last week to about 484.5 million barrels. Analysts polled by Reuters had forecast a decline of 2.3 million barrels.

More official figures are due later Wednesday morning from the U.S. Energy Information Administration.

“It’s going to very interesting how the Street interprets the effects of the recent rise in crude prices through their U..S production forecasts - one would have to imagine there will be considerable head-scratching as to whether WTI near US$54 will prompt increased investment in U.S. oil or whether a conservative financial strategy prevails,” Axi chief global market analyst Stephen Innes said.

In other commodities, spot gold rose 0.2 per cent to US$1,859.20 per ounce, while U.S. gold futures gained 0.8 per cent to US$1,858.

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“The big picture is it’s still a very constructive year for gold. With real yields remaining rather negative and the [U.S.} dollar continuing its path lower as the year unfolds, gold remains an attractive proposition,” IG Market analyst Kyle Rodda said.

“But I wouldn’t be surprised if we see dips or a short-term downtrend in gold as the market of the dollar balances out.”

Currencies

The Canadian dollar was down in early going as the U.S. dollar edged higher on stabilizing Treasury yields.

The day range on the Canadian dollar is 78.47 US cents to 78.71 US cents. In the predawn period, the loonie was trading near the low end of that spread.

There were no major Canadian economic releases on the calendar for Wednesday.

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On global markets, the U.S. dollar index was 0.1-per-cent higher at 90.14 after falling 0.5 per cent on Tuesday and is not far above last week’s close to three-year low of 89.206, according to figures from Reuters. Benchmark 10-year Treasury yields were lower early Wednesday, helping boost the greenback. The yield on the U.S. 10-year Treasury was trading down at 1.124 per cent just after 5:30 a.m. ET.

The euro, having earlier made its sharpest daily gain against the greenback, lost ground to trade 0.15 per cent lower on the day at US$1.2189.

Britain’s pound strengthened against the U.S. dollar to US$1.37, having been boosted the previous day by the Bank of England governor talking down the prospect of negative interest rates.

The Australian and New Zealand dollars fell 0.3 per cent and 0.4 per cent, respectively.

More company news

Canadian convenience store giant Alimentation Couche-Tard Inc. says it has approached French grocer Carrefour SA with a view to striking a friendly transaction in what would be a significant shift in strategy for the Circle K brand owner. Couche-Tard said in a statement late on Tuesday it has initiated “exploratory discussions” with Carrefour about a deal, the terms of which are still subject to discussion. At this stage, it is unclear whether the talks will result in an agreement or transaction, the company said. Carrefour also confirmed “very preliminary” discussions were under way.

Target’s strong sales streak extended through the pandemic-shrouded holiday season, as shoppers snapped up everything from clothing to home goods. The Minneapolis company reported Wednesday that its online sales surged 102% for the November and December period. Sales at its stores opened for a least a year rose 4.2%. Customer traffic rose 4.3% and average amount of sales per customer rose 12.3%.

Qualcomm Inc on Wednesday said it will acquire Nuvia Inc, a chip startup founded by Apple Inc veterans, for $1.4-billion, with plans to put the firm’s technology into its smartphone, laptop and automotive processors. The deal marks a big push by Qualcomm to reestablish a leading position in chip performance after several years of high-profile patent licensing litigation with rival Apple and regulatory authorities.

Visa and financial technology company Plaid said on that they would terminate their $5.3 billion merger agreement following a U.S. government lawsuit aimed at stopping the proposed transaction on antitrust grounds. The U.S. Justice Department had sued to stop the deal in November, saying that Visa was a “a monopolist in online debit transactions” and that the proposed acquisition “would eliminate a nascent competitive threat” to that monopoly.

Economic news

(8:30 a.m. ET) U.S. CPI for December. The consensus projection on the Street is a rise of 0.4 per cent from November and up 1.3 per cent year-over-year.

(2 p.m. ET) U.S. Beige Book on economic conditions is released

With Reuters, The Associated Press and The Canadian Press

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