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Equities
Canada’s main stock index opened higher, building on the previous session’s gains, with rising crude prices bolstering energy shares. On Wall Street, key indexes also started up with investors awaiting earnings from Amazon and Google-parent Alphabet after the close.
At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 94.25 points, or 0.53 per cent, at 17,786.7.
South of the border, the Dow Jones Industrial Average rose 65.0 points, or 0.22 per cent, at the open to 30276.88. The S&P 500 rose 18.0 points, or 0.48 per cent, at the open to 3791.84, while the Nasdaq Composite rose 139.7 points, or 1.04 , to 13543.102 at the opening bell.
Earnings will again be on investors minds Tuesday with Amazon and Google-parent Alphabet reporting after the close.
“Better than expected numbers from Amazon and Alphabet could give the stock market a much-needed boost that could help to recoup some gains after a rough week,” Axi market analyst Milan Cutkovic said.
“There are also signs that the vaccination campaign is making progress in the United States, while President Joe Biden resumed stimulus talks with Republicans.”
U.S. President Joe Biden and Republican senators met on Monday evening on a new COVID relief bill. The Republican’s $618-billion stimulus plan released early Monday was about a third the size of the President’s proposal. Top Democrats later on Monday filed a joint $1.9-trillion budget measure. The two sides have reportedly agreed to continue talking.
“Investors have accepted the fact that another stimulus package might not arrive as quickly as they initially hoped for, but see another long stalemate as unlikely, especially since Democrats could move forward with their plans without bipartisan support,” Mr. Cutkovic said.
Retail trading also continued to remain in focus although recent targets GameStop and silver were both down in early going.
GameStop’s New York-listed shares were down 40 per cent in early trading. Spot silver prices slipped 4.8 per cent to US$27.59 per ounce, as investors locked in profits after the metal neared an eight-year high on Monday.
In this country, earnings from Canada’s oil patch will draw investor attention with Imperial Oil reporting its latest results ahead of the start of trading.
Imperial Oil posted a quarterly loss, hit by impairment charges related to abandoned assets in Alberta. The Calgary, Alberta-based company posted a loss of $1.15-billion, or $1.56 per share, for the fourth quarter ended Dec. 31, from a profit of $3-million, or breakeven per share, in the third quarter.
On Wall Street, Pfizer Inc on Tuesday forecast sales of about US$15-billion from the coronavirus vaccine that it is making along with German partner BioNTech. The company said it expects total 2021 revenue of between US$59.4-billion and US$61.4-billion.
Overseas, the pan-European STOXX 600 was up 1.04 per cent. Britain’s FTSE 100 rose 0.61 per cent. Germany’s DAX added 1.16 per cent and France’s CAC 40 gained 1.68 per cent.
In Asia, Japan’s Nikkei finished up 0.97 per cent. Hong Kong’s Hang Seng gained 1.23 per cent.
Commodities
Crude prices saw further gains with production cuts helping buoy sentiment.
The day range on Brent so far is US$56.33 to US$57.24. The range on West Texas Intermediate is US$53.45 to US$54.44. Both added more than 2 per cent on Monday.
The advance came amid signs that producers were tightening production. A Reuters survey found that, while OPEC crude production rose for a seventh month in January, the gains were smaller than expected.
At the same time, voluntary production cuts of 1 million barrels a day by Saudi Arabia were set to be implemented starting in February.
“It has been a good week for oil prices which continue to rise with WTI also breaching US$54 a barrel and surprisingly quietly with little fanfare,” Axi chief global market strategist Stephen Innes said.
“This move reflects the continued good compliance on the OPEC+ and a sense of relief that we have one of the worst winter months in the northern hemisphere behind us.”
In other commodities, silver fell on Tuesday, retreating from a near eight-year peak in the previous session.
Spot silver slipped 4.8 per cent to US$27.59 an ounce, after rising 7.3 per cent to hit its highest since February 2013 at $30.03 on Monday. Monday’s gains as retail investors switched their focus to the metal from heavily shorted stocks the previous week.
“While the retail hoards may be enjoying the momentum-driven day in the sun at the moment, they will also discover that the silver exit door is tiny,” OANDA senior analyst Jeffrey Halley said in an early note.
Currencies
The Canadian dollar rose in early going, buoyed by rising crude prices and firmer market sentiment, while its U.S. counterpart slipped against a group of world currencies.
The day range on the loonie is 77.77 US cents to 78.23 US cents.
“The U.S. dollar is generally slightly weaker overnight as equity futures build on yesterday’s gains and tech stocks lead,” RBC chief currency strategist Adam Cole said.
“The Norwegian krone and the Canadian dollar are outperforming as crude prices test the top of the last month’s range.”
There were no major Canadian economic releases on Tuesday’s calendar.
The U.S. dollar index eased 0.1 per cent to 90.87 amid further gains for global stocks but stayed not far from its overnight peak of 91.063, its strongest level since Dec. 10, according to figures from Reuters.
Against the yen, the U.S. dollar briefly crossed 105 yen for the first time since mid-November and held firm at 104.875 yen.
The euro was trading at US$1.2078, just above an early December low of US$1.2056 hit in the previous session.
More company news
Brookfield Property Partners LP reported a loss in its latest quarter compared with a profit a year earlier when it benefited from higher valuation gains, as well as strong performance in several of its investments. The real estate company says it lost US$38-million or 40 cents per unit for the quarter ended Dec. 31 compared with a profit of US$1.55-billion or $1.00 per unit in the same quarter a year earlier. Company funds from operations and realized gains totalled US$287-million or 30 cents per unit, down from US$459-million or 48 cents per unit in the same quarter a year earlier.
Exxon Mobil on Tuesday posted its first annual loss as a public company after the COVID-19 pandemic hammered energy prices and it sliced over $20 billion off the value of its shale gas properties in the fourth quarter. The company reported a net annual loss of $22.44-billion for 2020, compared with a full-year profit of $14.34 billion in 2019.
United Parcel Service Inc on Tuesday posted a 26.6% rise in quarterly adjusted profit, as its home delivery volume surged to a record on pandemic-fueled online purchases of holiday gifts and staples ranging from food to furniture. The world’s biggest parcel delivery company said its adjusted net income rose to $2.33-billion, or $2.66 per share, in the in the fourth quarter ended Dec. 31, from $1.84-billion, or $2.11 per share, a year earlier.
BP’s fourth-quarter profit sank to US$115-million, missing analysts’ forecasts, pummelled by continued weak energy demand due to the coronavirus epidemic and weak trading results. On annual basis, BP sunk to a loss of US$5.7-billion, its first in a decade after it wrote down the value of oil and gas assets by US$6.5-billion as a result of sharply lowering its long-term energy prices.
Harley-Davidson Inc unveiled a five-year turnaround plan to boost motorcycle sales in its more profitable markets including the United States, as annual shipments tumbled to a more than 20-year low due to the coronavirus crisis. Total 2020 shipments to its dealers fell 32% to about 145,200, the lowest since 1997. Annual retail sales, an indicator of demand at dealers, fell 17% to 180,200, the lowest since 1998.
Britain’s competition watchdog said on Tuesday that Viagogo would need to sell all of StubHub’s business outside North America after its probe found the deal would reduce competition in the secondary ticketing market in UK. The Competition and Markets Authority said the international business of StubHub would need to be independently owned and run by a separate company. Viagogo bought StubHub in a $4.05-billion deal from eBay last year.
China’s Alibaba Group Holding Ltd beat Wall Street estimates for third-quarter revenue on Tuesday, as its e-commerce business benefited from a switch to online shopping triggered by the COVID-19 pandemic. Revenue rose 37% to 221.08 billion yuan ($34.24-billion) in the three months ended Dec. 31, above estimates of 214.38 billion yuan, according IBES data from Refinitiv.
Economic news
Euro area GDP for fourth quarter.
With Reuters and The Canadian Press
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Terry Weber