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Equities

Canada’s main stock index slipped at the start of trading Tuesday, weighed down by weakness in energy shares. On Wall Street, trading was muted as investors looked ahead to earnings from some of the biggest names in tech after the close.

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At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 67.27 points, or 0.33 per cent, at 20,097.69.

The Dow Jones Industrial Average fell 65.41 points, or 0.19 per cent, at the open to 35,078.90.

The S&P 500 opened lower by 5.92 points, or 0.13 per cent, at 4,416.38. The Nasdaq Composite dropped 32.77 points, or 0.22 per cent, to 14,807.95 at the opening bell.

On Tuesday, Google-parent Alphabet, Microsoft and Apple all release results after the close.

“With Microsoft and Apple expected to post some bullish earnings numbers later today, expectations are high that even with today’s decent results already priced in, and there’s little doubt that they are, in the absence of other alternatives, any dips are likely to be bought into,” Michael Hewson, chief market analyst with CMC Markets U.K., said.

Early Tuesday, shares of Tesla were slightly weaker in morning trading even after the company reported a better-than-expected second-quarter profit. Excluding items, Tesla posted a profit of US$1.45 per share, easily topping analyst expectations for a profit of 98 US cents per share.

Tesla said revenue rose to US$11.96-billion from US$6.04-billion a year earlier, when its California factory was shut down for more than six weeks due to pandemic restrictions.

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Analysts had expected revenue of about US$11.3-billion, according to IBES data from Refinitiv.

In this country, Teck Resources Ltd said quarterly adjusted profit rose 4 per cent sequentially, driven by record-high copper prices. The company said adjusted profit attributable to shareholders rose to $339-million, or 63 cents per share, in the second quarter, from $326-million, or 61 cents per share, in the previous quarter. Teck shares were down about 3 per cent in morning trading.

On the economic side, the Federal Reserve begins its two-day meeting. The central bank will deliver its next policy decision on Wednesday afternoon.

Overseas, the pan-European STOXX 600 fell 0.41 per cent by midday. Britain’s FTSE 100 was off 0.42 per cent. Germany’s DAX and France’s CAC 40 slid 0.49 per cent and 0.27 per cent, respectively.

In Asia, Japan’s Nikkei gained 0.49 per cent. Hong Kong’s Hang Seng continued to post steep losses, closing down 4.22 per cent. The declines were driven by regulatory fears potentially affecting China’s tech and private education sectors.

Commodities

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Crude prices were steady with tight supply and continued vaccination efforts offsetting concerns about the spread of the Delta variant in some regions.

The day range on West Texas Intermediate is US$71.46 to US$72.33. The range on Brent is US$73.30 to US$74.19.

“The world is figuring how it will live with COVID and right now it still seems the short-term crude demand worries will prevent this tight market from sending oil prices much higher,” OANDA senior analyst Edward Moya said.

This week, the United States issued travel warnings to Spain and Portugal due to rising COVID-19 cases. A White House official told Reuters wider travel curbs would not be lifted due to the highly infectious Delta variant and rising domestic infections. However, Britain reported its lowest daily total of new COVID-19 cases since July 4 on Monday.

Later in the session, investors will get the first of two weekly U.S. inventory reports, with figures due from the American Petroleum Institute. More official figures follow on Wednesday from the U.S. Energy Information Administration. Analysts polled by Reuters are expecting weekly crude inventories to decline by more than 3 million barrels.

Gold slid as markets turn their attention to this week’s Fed policy decision.

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Spot gold fell 0.1 per cent to US$1,794.68 per ounce. U.S. gold futures eased 0.3 per cent to US$1,793.60.

“Gold remains very much in consolidation mode as it continues to hover around US$1,800,” OANDA senior analyst Craig Erlam said.

“The yellow metal was one of last week’s losers but it didn’t suffer too much considering the dramatic improvement in risk appetite.”

Currencies

The Canadian dollar was down slightly while its U.S. counterpart steadied against a group of world currencies ahead of the Fed’s policy decision later in the week.

The day range on the loonie is 79.41 US cents to 79.77 US cents.

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“Overnight markets have been quiet, USD stabilizing after small losses against most of the majors late yesterday and there has been little in the way of news to digest,” RBC chief currency strategist Adam Cole said.

There were no major Canadian economic releases on Tuesday’s calendar. Investors will get a fresh reading on inflation on Wednesday morning.

On world markets, the U.S. dollar index was trading at 92.73, not far from an early April high of 93.19 hit on July 21, according to figures from Reuters. The U.S. dollar index has rallied more than 4 per cent from 2021 lows of below 90 hit in late May.

In early London trading on Tuesday, the euro was changing hands at US$1.1780, not far from an early April low of US$1.1752 hit last week.

Britain’s pound was above its 20-day moving average and near a one-week high at US$1.3827.

More company news

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United Parcel Service Inc posted a 14.5-per-cent rise in quarterly revenue on Tuesday, helped by higher ecommerce deliveries, air shipments and specialized handling services of healthcare products such as COVID-19 vaccines. The parcel delivery company said adjusted earnings per share rose 43.7 per cent to US$3.06 in the second quarter. Total revenue jumped to US$23.42-billion from US$20.46-billion.

General Electric Co lifted its free cash flow forecast for the year, as a recovery in the aviation market is expected to boost demand for the U.S. conglomerate’s jet engines and spare parts. The Boston-based company said it expects 2021 free cash flow to be US$3.5-billion to US$5-billion, up from its prior forecast of US$2.5-billion to US$4.5-billion. Revenue rose to US$18.28-billion from US$16.81-billion in the quarter ended June 30. GE reported adjusted profit of 5 US cents per share for the quarter, compared with Refinitiv’s average analyst estimate of a profit of 3 US cents per share.

3M Co, which makes N95 face masks and Scotch-Brite home care products, reported a 16.7% rise in quarterly profit, helped by a rebound in several of its key end markets as economies recover from the impact of the COVID-19 pandemic. Net income attributable to 3M rose to US$1.52-billion, or US$2.59 per share, in the second quarter ended June 30, from US$1.30-billion, or US$2.25 per share, a year earlier. Net sales rose about 25% to US$8.9 billion.

Economic news

Federal Reserve’s two-day policy meeting begins

(8:30 a.m. ET) U.S. durable goods orders for June.

(9 a.m. ET) U.S. S&P Case-Shiller Home Price Index (20 city) for May.

(9 a.m. ET) U.S. FHFA House Price Index for May.

(10 a.m. ET) U.S. Conference Board Consumer Confidence Index for July.

With Reuters and The Canadian Press

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