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Canada’s main stock index opened higher on Tuesday as oil prices rose following strong Chinese import data, while consumer prices in the United States spiked, signaling faster economic growth.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 42.91 points, or 0.22%, at 19,244.19.

The S&P 500 opened nearly flat, while Johnson & Johnson slipped as federal health agencies recommended pausing the use of its COVID-19 vaccine. The actions were in response to six U.S. recipients developing a rare disorder involving blood clots.

The S&P 500 opened higher by 2.11 points, or 0.05%, at 4,130.10, while the Nasdaq Composite gained 52.45 points, or 0.38%, to 13,902.45 at the opening bell. The Dow Jones Industrial Average fell 24.24 points, or 0.07%, at the open to 33,721.16.

The setback for the Johnson & Johnson vaccine, which is approved in the U.S., may be seen as a setback for accelerating global vaccinations. But market watchers were quick to note it is only one of several vaccines being distributed worldwide.

The benchmark 10-year U.S. Treasury yield retreated slightly after the U.S. reported consumer price data for March. U.S. consumer prices increased a sharp 0.6 per cent in March, the biggest increase since 2012, while inflation over the past year rose a sizable 2.6 per cent. The big gains were expected to be a temporary blip and not a sign that long dormant inflation pressures were emerging.

The increase in its consumer price index followed a 0.4% increase in February and was the biggest one-month gain since a 0.6% rise in August 2012, the Labor Department reported Tuesday.

A steady retreat in bond yields since the start of this month on expectations that a spike in inflation this year would be transitory has revived demand for high-growth tech stocks and sent the S&P 500 and the Dow to record highs.

In Canada, the focus is on Air Canada stock following news Monday evening that the federal government will take an equity stake in Air Canada as part of a multibillion-dollar pandemic rescue plan for the country’s largest airline.

The government will allow Air Canada to access up to $5.9-billion through the Large Employer Emergency Financing Facility program, Finance Minister Chrystia Freeland and Transport Minister Omar Alghabra announced. As part of the package, Ottawa is buying $500-million of Air Canada stock, or 21.6 million shares, at just over $23 each and has the right to buy 14 million more. The federal government’s voting interest in the airline is capped at just below 20 per cent.

Air Canada shares closed at $27 on Monday, well above the price the government is paying. Several analysts Tuesday morning expressed support for the deal. In early trading Tuesday, shares were down about 4 per cent.

Investors are also marking time ahead of the start of the first-quarter earnings season, with results from Goldman Sachs , JPMorgan and Wells Fargo on deck on Wednesday. Analysts expect earnings for S&P 500 firms to jump 25% from a year ago, driven by strength in consumer discretionary and financial companies, according to Refinitiv IBES data.



Oil prices ticked up on Tuesday after strong Chinese import data but markets broadly shrugged off Middle East tensions which have so far not disrupted oil supply.

Brent crude oil futures were up 25 cents, or 0.4%, at $63.53 a barrel by 0855 GMT while U.S. crude oil futures gained 14 cents, or 0.2%, to $59.84 a barrel. Both contracts are on course for their fifth session of sub-1% change.

China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery as global demand picks up amid progress in worldwide COVID-19 vaccinations, while import growth surged to the highest in four years.

Crude oil imports into China jumped 21% in March from a low base of comparison a year earlier as refiners ramped up operations.

Also supporting prices, U.S. crude oil stockpiles were expected to have fallen last week for a third straight week, while distillate and gasoline inventories likely grew, a preliminary Reuters poll showed on Monday.

Meanwhile, copper prices recovered on Tuesday as industrial buyers scooped up the material, but speculators remained cautious after top metals consumer China warned it would dampen high commodity prices.

Currencies and bonds

The Canadian dollar is mildly weaker against the greenback this morning. The U.S. 10-year Treasury yield was hovering in below recent highs, last seen at about 1.67%.

“While the fundamental backdrop remains constructive - the Bank of Canada’s Business Outlook Survey yesterday indicated a significant improvement in business confidence, hot on the heels of Friday’s stellar jobs data - Canada’s COVID performance may be weighing on sentiment,” said a note from Scotiabank analysts.

Amid reports that Canada has overtaken the U.S. in per capita daily cases for the first time since the pandemic began, with Ontario particularly hard hit, “the risk is perhaps that the virus situation prompts the BoC to retain a very cautious outlook on prospects rather than make the move towards tapering that markets are expecting at the April 21st policy decision,” the bank added. “We still rather think that bargain hunters will look at short-term gains in the USD through to the 1.26 area (79.36 cents U.S.) as an opportunity to pick up a fundamentally cheap-looking CAD, however.”

Other corporate news

U.S.-listed shares of e-commerce firm and search giant Baidu fell about 2% each in premarket trading as China’s market regulator warned internet companies to stop using any banned practices.

Cryptocurrency and blockchain-related firms including Riot Blockchain and Marathon Digital Holdings jumped 9% and 8% as bitcoin prices soared 4.5%, a day ahead of listing of Coinbase, the largest U.S. cryptocurrency exchange.

American Airlines said on Tuesday it expects its first-quarter revenue to plunge about 62% compared with the same period in 2019, and to post a loss of about $2.7 billion to $2.8 billion, excluding the gains from a payroll support program. The company had previously forecast a decline of between 60% and 65%.

Earnings include: Cogeco Inc.; Cogeco Communications Inc.; Corvus Gold Inc.

Economic news

U.S. consumer prices increased a sharp 0.6% in March, the biggest increase since 2012, while inflation over the past year rose a sizable 2.6%. The big gains were expected to be a temporary blip and not a sign that long dormant inflation pressures were emerging.

With files from Reuters