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Equities

Canada’s main stock index was little changed at the start of trading Monday with weakness in tech stocks offsetting gains in the energy sector. South of the border, key indexes pulled back slightly from last week’s record levels as investors look ahead of tech earnings and the latest policy decision from the Federal Reserve.

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At 9:34 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 7.91 points, or 0.04%, at 20,196.34.

In the U.S. , the Dow Jones Industrial Average fell 5.69 points, or 0.02 per cent, at the open to 35,055.86.

The S&P 500 opened lower by 2.21 points, or 0.05 per cent, at 4,409.58, while the Nasdaq Composite dropped 15.96 points, or 0.11 per cent, to 14,821.03 at the opening bell.

Earnings will continue to dominate for the week ahead. Tesla reports after Monday’s close. Alphabet and Apple follow on Tuesday. Facebook and Amazon are also on tap to report later in the week.

“These are especially important given that these tech companies have predominantly driven the moves higher in U.S. markets to recent record highs, and investors won’t want to see any signs of a paring back of guidance expectations over the rest of the year,” Michael Hewson, chief market analyst with CMC Markets U.K., said.

In this country, investors will get results from Shopify on Wednesday morning. Loblaw and CP Rail also report results that day.

At midweek, investors will also get the Fed’s latest policy announcement, due at 2 p.m. ET on Wednesday.

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“Financial markets are waiting to see if the latest global growth concerns will be enough reason for the Fed to hold off on discussing potential strategies for tapering their monthly purchases of $80-billion in Treasury securities and $40-billion in mortgage securities,” OANDA senior analyst Craig Erlam said.

On the corporate side, pipeline operator Inter Pipeline Ltd said it has terminated an agreement to be acquired by Pembina Pipeline Corp. Inter Pipeline has agreed to pay Pembina a termination fee of $350-million.

Inter Pipeline shares were down about 1 per cent just after the start of trading in Toronto. Pembina stock rose about 3 per cent.

Overseas, the pan-European STOXX 600 fell 0.19 per cent by afternoon. Britain’s FTSE 100 was off 0.13 per cent. Germany’s DAX and France’s CAC 40 fell 0.33 per cent and 0.06 per cent, respectively.

In Asia, Hong Kong’s Hang Seng dropped 4.13 per cent, hit by weakness in tech shares on continued regulatory concerns. Japan’s Nikkei gained 1.04 per cent.

Commodities

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Crude prices steadied after early declines as the rise of COVID-19 cases in some regions continues to spark concerns about the recovery in demand.

The day range on Brent is US$72.75 to US$74.50. The range on West Texas Intermediate is US$70.56 to US$72.43. Both benchmarks were down by more than 1 per cent early Monday but later recouped most of the losses as the North American open approached.

Coronavirus cases continued to rise over the weekend with some countries posting record daily increases and extending lockdown measures that could slow oil demand, Reuters reports. China, the world’s largest crude importer, has also seen a rise in COVID-19 cases while the nation battled severe floods and a typhoon in central and eastern parts of the country, the news agency said.

In other commodities, gold prices rose, helped by a weaker U.S. dollar.

Spot gold rose 0.4 per cent to US$1,807.73 per ounce. U.S. gold futures rose 0.4 per cent to US$1,808.80 per ounce.

Currencies

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The Canadian dollar was slightly firmer as its U.S. counterpart dipped against a basket of world currencies ahead of the Fed decision later in the week.

The day range on the loonie is 79.43 US cents to 79.63 US cents.

“Weaker stocks and softer crude oil prices are having no obvious impact on the CAD in trading so far today,” Shaun Osborney, chief FX strategist with Scotiabank, said in an early note.

There were no major Canadian economic releases on Monday. Investors will get new inflation figures on Wednesday followed by a reading on May GDP on Friday.

On world markets, the U.S. dollar index slipped slightly to 92.833 due to pressure from the euro and yen, but was still close to last week’s 3-1/2-month high of 93.194, according to figures from Reuters.

The euro edged up 0.3 per cent to US$1.1797.

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In cryptocurrencies, bitcoin jumped 10 per cent to US$39,850, its highest in five weeks, in the wake of a report that Amazon is weighing accepting crypto payments by year’s end.

More company news

Toymaker Hasbro Inc beat quarterly revenue estimates on Monday, as its film and television production business returned to growth after being largely shutdown by the pandemic last year. The Monopoly maker’s net revenue rose 54% to $1.32-billion in the three months ended June 27, beating analysts’ average estimate of $1.16-billion, according to a Refinitiv IBES estimate.

Economic news

(10 a.m. ET) U.S. new home sales for June. The Street is forecasting an annualized rate rise of 4.0 per cent.

With Reuters and The Canadian Press

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