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Equities

Canada’s main stock index jumped at Tuesday’s open, helped by climbing crude prices. On Wall Street, major indexes started in record territory, lifted by optimism over the rollout of coronavirus vaccines and the potential for U.S. government stimulus.

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At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 97.78 points, or 0.53 per cent, at 18,557.99.

In the U.S., the Dow Jones Industrial Average rose 13.7 points, or 0.04 per cent, at the open to 31472.08. The S&P 500 rose 4.8 points, or 0.12 per cent, at the open to 3939.61, while the Nasdaq Composite rose 56.7 points, or 0.40 per cent, to 14152.215 at the opening bell.

U.S. and Canadian markets were closed on Monday. All three main Wall Street indexes saw gains of more than 1 per cent last week.

“Vaccine hopes continue to boost investors´ risk appetite,” Axi market analyst Milan Cutkovic said.

“Markets are hoping that the global vaccination campaign will pave the way towards a return to normality, perhaps sooner than initially expected,” he said.

In this country, The Globe reports that the federal government and Canada’s airlines are at a critical stage in negotiations that could soon end months of haggling and result in a multibillion-dollar rescue plan for the industry. Michael Sabia, the veteran corporate executive recently recruited as deputy minister of finance, is close to finalizing a bailout package, according to this morning’s report.

Meanwhile, investors also got a reading on the state of Canada’s housing market in January. The Canadian Real Estate Association said home sales rose 2 per cent on a monthly basis. Year-over-year sales were up 35.2 per cent. The MLS Home Price Index (HPI) rose 1.9 per cent month-over-month and was up 13.5 per cent for the year, CREA said.

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Overseas, the pan-European STOXX 600 was up 0.02 per cent by afternoon. Britain’s FTSE 100 gained 0.18 per cent. Germany’s DAX and France’s CAC 40 slid 0.13 per cent and 0.06 per cent, respectively.

In Asia, Hong Kong’s Hang Seng finished up 1.9 per cent. Japan’s Nikkei advanced 1.28 per cent. Markets in China were closed for the Lunar New Year holiday.

Commodities

Crude prices held near their best levels in more than a year as a winter storm shut wells in Texas.

The day range on Brent is US$62.93 to US$63.70. The range on West Texas Intermediate is US$59.57 to US$60.95. Both benchmarks are near their best levels since January 2020.

“The focus will soon shift to the OPEC+ meeting taking place in early March,” Axi chief market strategist Stephen Innes said.

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“It will be necessary for the group to continue to present a unified front and convey the impression that it is still enforcing supply discipline. I suspect behind-closed-door discussions will be centering on how to add more oil back into the market without upsetting the proverbial apple cart.”

Prices were underpinned by cold weather in the U.S., which halted Texas oil wells and refineries on Monday and forced restrictions on natural gas and crude pipeline operators.

Texas produces roughly 4.6 million barrels of oil per day and is home to 31 refineries, the most of any U.S. state, according to Reuters.

The advance, however, was capped by news that Norway’s oil industry employers reached a labour agreement with the Safe labour union on Tuesday, heading off a strike at the Mongstad crude terminal and shutdowns of major offshore oil and gas fields.

In other commodities, U.S. gold futures were steady at US$1,824.00 per ounce, while silver gained 0.5 per cent to US$27.73.

Platinum extended its rally to a near 6-1/2-year high.

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Platinum , used in catalytic converters for vehicles, was up 0.1 per cent to US$1,304.06 per ounce, having earlier hit $1,336.50, its highest since September 2014.

Currencies

The Canadian dollar was trading above 79 US cents in early going, bolstered by rising crude prices and improved risk sentiment, while its U.S. counterpart held near a three-week low against a group of world currencies.

The day range on the loonie is 79.06 US cents to 79.30 US cents.

“Overnight markets have been quiet, still constrained by international holidays and a lack of any real news,” RBC chief currency strategist Adam Cole said. “USD is marginally softer as higher global equities dominate higher yields.”

On world markets, the U.S. dollar index, which weighs the greenback against a basket of world currencies, steadied at 90.229, its lowest level since Jan. 27. The dollar index has declined 1.5 per cent over the last eight trading sessions, according to figures from Reuters.

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Britain’s pound extended gains to hit US$1.3946, its highest level since April 2018.

The euro edged up 0.2 per cent higher to US$1.2150.

Early Tuesday, bitcoin hit a new high of US$50,000, and was last up 3.9 per cent at US$49,891. The cryptocurrency is up more than 70 per cent so far this year.

More company news

Private equity giant Cerberus Capital Management and the founders of Dorel Industries Inc. have pulled the plug on their effort to take the Canadian consumer products company private following what appears to be insurmountable opposition to the proposal from shareholders. The outcome thrusts the spotlight back onto Dorel chief executive Martin Schwartz and other founders and senior leaders, who now face increased investor expectations to build on COVID-19 sales gains and bring the company’s three different business lines back to steady profit growth. It also raises questions about whether Mr. Schwartz and his family, who control Dorel through multivoting shares, still harbour a desire to pursue a similar transaction in the future.

Glencore on Tuesday reinstated its dividend after net debt fell by 10% in its full-year 2020, helped by surging commodity prices in the second half The commodities trader and miner which scrapped its dividend in August last year after a first-half loss amid the COVID-19 pandemic, said it is recommending a distribution of $0.12 per share.

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Commercial property data vendor CoStar Group Inc said on Tuesday it has offered to buy real-estate data provider CoreLogic Inc for about $6.9-billion in an all-stock deal. CoStar offered 0.1019 shares of its common stock in exchange for each share of CoreLogic, representing a value of about $95.76 per share.

Southwest Airlines said on Tuesday it expects cash burn in the first quarter to slow as bookings improve in February. The airline now expects its average core cash burn to be about $15 million a day in the first quarter, compared with $17 million it had estimated previously.

Economic news

(8:30 a.m. ET) Canadian international securities transactions for December.

(8:30 a.m. ET) U.S. Empire State Manufacturing Survey for February.

(9 a.m. ET) Canada’s existing home sales and average prices for January.

(9 a.m. ET) Canada’s MLS Home Price Index for January.

With Reuters and The Canadian Press

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