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Equities

Canada’s main stock index slid early Monday with weakness in tech shares offsetting gains by the energy sector. On Wall Street, the tech-heavy Nasdaq fell in early trading, pressured by an uptick in bond yields.

At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 29.06 points, or 0.14 per cent, at 20,121.81.

In the U.S., the Nasdaq Composite dropped 73.57 points, or 0.51 per cent, to 14,493.12 at the opening bell, while the Dow Jones Industrial Average fell 13.50 points, or 0.04 per cent, at the open to 34,312.96.

The S&P 500 opened lower by 8.20 points, or 0.19%, at 4,348.84.

“The worries of supply chain continue giving cold chills,” Ipek Ozkardeskaya, senior analyst with Swissquote, said.

“The worsening global supply chain disruption, combined with rising inflation - which looks much less transitory than what the policymakers first thought, and which results in a narrowing capacity to respond to a slowing economic growth - could continue weighing on investor sentiment this week.”

Markets were also keeping an eye on the evolving situation with China’s Evergrande. Evergrande shares were suspended from trading in Hong Kong on Monday amid reports that another developer, Hopson Development Holdings, was planning to acquire a majority share in Evergrande Property Services Group.

Markets will also be awaiting the release late in the week of the latest U.S. employment figures. Economists are expecting the U.S. economy to have added 475,000 new positions in September, up from 235,000 in August. The numbers are due at the end of the week.

Canadian jobs numbers will also be released on Friday. Economists are expecting to see the addition of about 60,000 new positions in this country for the month with the jobless rate seen sliding to 6.9 per cent from 7.1 per cent.

On the corporate side, Sun Life Financial Inc. said on Sunday it has agreed to buy oral health care company DentaQuest for $2.47-billion. The transaction will be financed using cash and debt, Sun Life said in a statement, adding that the deal is expected to close in the first half of 2022.

Overseas, the pan-European STOXX 600 recouped early losses as the day progressed and was up 0.21 per cent by afternoon. Britain’s FTSE 100 gained 0.48 per cent. France’s CAC 40 rose 0.23 per cent while Germany’s DAX fell 0.06 per cent.

In Asia, Japan’s Nikkei closed down 1.13 per cent. Hong Kong’s Hang Seng fell 2.19 per cent. Markets in China are closed for most of the week.

Commodities

Crude prices steadied in early going as traders await the outcome of the latest OPEC+ policy meeting.

The day range on Brent is US$78.75 to US$79.50. The range on West Texas Intermediate is US$75.32 to US$76.20.

OPEC members and their allies were meeting Monday to determine whether to raise output. The group agreed in July to boost production by 400,000 barrels a day every month until at least next spring. OPEC+ has faces some pressure to increase output in response to rising prices and increased global demand.

Reuters, citing three OPEC sources, reported that the group is likely to stick to its 400,000 barrel a day target in November.

“The most reasonable is to add 400,000 bpd, no more,” one of the sources told Reuters when asked about what ministers were expected to decide. Another also said this was the most likely outcome, but left room for a possible increase, according to the news agency.

In other commodities, gold prices were holding below a one-week high.

Spot gold was little changed at US$1,759.11 per ounce, after hitting its highest since Sept. 23 at US$1,765.54 earlier in the day. U.S. gold futures rose 0.1 per cent to US$1,760.20.

Currencies

The Canadian dollar was firmer, trading above 79 US cents in early going, while its U.S. counterpart edged up against a basket of currencies after two sessions of declines.

The day range on the loonie is 79.02 US cents to 79.30 US cents.

“The loonie strengthened ever so slightly last week, overcoming softness in the first half of the week,” Benjamin Reitzes, director, Canadian rates and macro strategist with Bank of Montreal, said.

“Rallying oil prices provided a lift, with WTI finishing the week at its best closing level in almost exactly three years. To start the week, the loonie is slightly firmer despite U.S. equity futures pointing to a lower open.”

Canadian investors got a weaker-than-expected reading on Auguts building permits ahead of the North American open. Statistics Canada said permits fell 2.4 per cent. Economists had been looking for an increase of more than 3 per cent.

On world markets, the U.S. dollar index edged 0.1 per cent higher at 94.04, breaking a two-day losing streak.

In early London trading on Monday, the euro dipped back below US$1.16 and at US$1.1598 is not far from last week’s trough at US$1.1563, according to figures from Reuters.

The offshore yuan weakened about 0.3 per cent.

In bonds, U.S. Treasury yields had pulled back in the premarket period but ticked higher as business in North America got underway. The yield on the 10-year note was last up 1.498 per cent.

More company news

Magna International Inc. is walking away from its deal to buy Swedish tech company Veoneer Inc. after its offer was topped by Qualcomm Inc. The Ontario-based auto parts company says it waived a four-day matching period to make a counter-proposal after the Qualcomm offer was ruled to be a superior proposal.

Surge Energy Inc. says it has signed a deal to buy Fire Sky Energy Inc. in an agreement valued at $58 million. Fire Sky owns assets producing more than 1,500 barrels of oil equivalent per day focused in Surge’s core area in southeast Saskatchewan. The deal will see Surge issue 11.2 million shares and assume about $3-million in net debt.

McDonald’s Corp on Monday set a new target to cut global greenhouse gas emissions to net zero by 2050, from the beef in its burgers to the light bulbs in its restaurants. The burger chain also said it was working with the nonprofit Science Based Targets initiative (SBTi) to revamp its existing climate change targets. It aims to lower absolute emissions by about a third for both its suppliers and its nearly 40,000 company-run and franchised restaurants around the world by 2030.

Economic news

(8:30 a.m. ET) Canadian building permits for August.

(10 a.m. ET) U.S. factory orders for August.

With Reuters and The Canadian Press

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