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Equities

Canada’s main stock index was treading water early Monday after last week’s record showing, with crude prices holding relatively steady. On Wall Street, major indexes retreated slightly at the open, trading off the previous week’s record highs.

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At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 8.53 points, or 0.04 per cent, at 19,342.79.

In the U.S. , the Dow Jones Industrial Average fell 18.3 points, or 0.05 per cent, at the open to 34182.38. The S&P 500 fell 5.7 points, or 0.14 per cent, at the open to 4179.8, while the Nasdaq Composite dropped 67.8 points, or 0.48 per cent, to 13984.583 at the opening bell.

“Stocks will kick off the week at record highs, with investors digesting what appears to be an optimistic recovery despite mounting concerns about new COVID-19 variants,” Axi chief market strategist Stephen Innes said.

On Wall Street, earnings will continue to pull focus with more than 70 S&P 500 companies scheduled to release results this week. Monday’s earnings include Coke and IBM. Later in the week, investors get results from Netflix.

In this country, Finance Minister Chrystia Freeland releases her first budget. The Globe and Mail reports this morning that the budget will include an extension of wage and rent subsidies through to September, $100-billion of new stimulus money for housing, transit and green technology, and sets the stage for a national $10-a-day child-care program. The stimulus program will also have a heavy focus on small and medium-sized businesses, including a new hiring incentive launching in June that employers can use to either hire new workers or increase the hours of existing employees.

On Wednesday, Canadian investors will also get the latest policy decision from the Bank of Canada, with markets awaiting word on the central bank’s plans to begin tapering bond purchases.

“Our economists expect the BoC to taper its QE purchases on Wednesday,” Alvin Tan, Asia FX strategist with RBC, said in an early note.

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“Specifically, we see bond purchases falling from $4-billion a week to $3-billion a week, with reductions across the curve but mostly concentrated in the 2-year sector. No change in the overnight rate is expected, but there will be attention to the forward guidance on rates.”

On the corporate side, Saskatchewan-based fertilizer giant Nutrien Ltd. said on Sunday that Chuck Magro is stepping down as chief executive officer and will be replaced by Mayo Schmidt, who is currently the company’s chair. As part of the executive shuffle, Russ Girling, Nutrien director and the former CEO of TC Energy Corp., will become board chairman.

Overseas, the pan-European STOXX 600 edged up 0.04 per cent by afternoon. Britain’s FTSE 100 fell 0.13 per cent. Germany’s DAX slid 0.13 per cent. France’s CAC 40 edged up 0.32 per cent. The European Central Bank makes its next policy decision on Thursday.

In Asia, Japan’s Nikkei finished up 0.01 per cent. Hong Kong’s Hang Seng added 0.47 per cent.

Commodities

Crude prices steadied as rising coronavirus infections in some regions and related restrictions continue to raise concerns about future demand.

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The day range on Brent is US$66.17 to US$66.95. The range on West Texas Intermediate is US$62.63 to US$63.35. Both benchmarks jumped by more than 6 per cent last week.

“The energy markets have found support from industry agency outlooks, and the latest round of inventory draws, pointing to a healthy recovery from the pandemic,” Axi’s Stephen Innes said.

“As both gasoline and jet fuels remain in catch up mode.”

However, markets continue to monitor rising infections in some parts of the world.

According to Reuters, India reported a record rise in coronavirus infections of 273,810 on Monday, increasing overall cases to just over 15 million, making the country the second-worst affected after the United States.

In other commodities, gold prices edged higher, close to the seven-week high seen in the previous session, helped by a softer U.S. dollar.

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Spot gold was up 0.2 per cent at US$1,778.91 per ounce, after hitting its highest since Feb.25 at US$1,783.55 on Friday.

U.S. gold futures were steady at US$1,780.10 per ounce.

“At the moment, the combination of a weaker U.S. dollar and easing interest rates is supportive for gold, despite better economic outlook,” Michael McCarthy, chief market strategist at CMC Markets, said.

Currencies

The Canadian dollar was higher, trading above 80 US cents, ahead of the afternoon release of the latest federal budget, while its U.S. counterpart held near a one-month low against a group of world currencies.

The day range on the loonie is 79.82 US cents to 80.18 US cents.

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The federal government will release its first budget in two years on Monday afternoon.

“The budget is expected to provide billions of dollars for pandemic aid programs and subsidies, as Canada battles a third wave of COVID-19 which will undoubtedly have a negative impact on the economy,” OANDA market analyst Kenny Fisher said in an early note.

“The budget will provide a clear picture of the state of the country’s finances, and if the situation is worse than expected, the Canadian dollar could lose ground today.”

On world markets, the U.S. dollar index, which weighs the greenback against six other currencies, was at 91.552, near last week’s low of 91.484, a level not seen since March 18.

The U.S. dollar bought 108.40 yen, its lowest against the Japanese currency since March 24, according to figures from Reuters.

The euro traded at US$1.1985, flat on the day and near its highest against the dollar since March 4.

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More company news

Coca-Cola Co topped Wall Street estimates for quarterly revenue, fueled by strong demand for its beverages from the reopening of restaurants and cinema theaters following accelerated vaccine rollouts. Net revenue rose to US$9.02-billion in the first quarter, from US$8.60-billion a year earlier, above analysts’ average estimate of US$8.63-billion, according to IBES data from Refinitiv.

Harley-Davidson reported a 10-per-cent rise in first-quarter revenue, helped by an increase in shipments. The company’s total revenue rose to US$1.42-billion in the quarter ended March 28 from about US$1.30-billion a year earlier.

GameStop Corp said on Monday Chief Executive Officer George Sherman would resign, as it pivots from a brick-and-mortar video game retailer to an e-commerce firm. Mr. Sherman will be stepping down on July 31 or earlier upon the appointment of a successor, the company said in a statement. Its board is searching to identify chief executive officer candidates.

TSX-listed Largo Resources Ltd. said the company’s common shares are expected to start trading on the NASDAQ on Monday under the symbol LGO. “We believe this listing will provide Largo with increased visibility with prospective U.S. investors, improve the Company’s liquidity and assist in developing a more diversified shareholder base as we continue on our anticipated growth trajectory,” Largo president and CEO Paulo Misk said in a statement.

Economic news

(8:15 a.m. ET) Canada housing starts for March.

Canada releases federal budget.

With Reuters and The Canadian Press

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