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Canada’s main stock index started higher Tuesday after a long weekend with energy and financial shares buoying sentiment. On Wall Street, key indexes pulled back after Monday’s rally with a disappointing forecast from Snap Inc. hitting tech stocks.

At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 89.34 points, or 0.44 per cent, at 20,286.95.

In the U.S., the Dow Jones Industrial Average fell 162.63 points, or 0.51 per cent, at the open to 31,717.61.

The S&P 500 opened lower by 30.81 points, or 0.78%, at 3,942.94, while the Nasdaq Composite dropped 208.83 points, or 1.81 per cent, to 11,326.44 at the opening bell.

“These wild swings from one day to the next have become the norm as investors try to pick the bottom in the markets only to be dealt another blow from one negative headline or another,” OANDA senior analyst Craig Erlam said. “And they continue to come thick and fast, leaving equity markets vulnerable to further drops.”

Social media shares took a hit early on as shares of Snapchat-owner Snap dropped nearly 40 per cent in early trading after the company warned in a note to employees that the company expects to miss targets for adjusted profit and revenue in the current quarter.

In this country, investors will be awaiting earnings from Canada’s biggest banks this week. Bank of Nova Scotia and Bank of Montreal report on Wednesday. CIBC, TD Bank and RBC follow on Thursday. National Bank releases its latest results on Friday.

The Globe’s James Bradshaw reports that investors are expecting a strong quarter from the banks, but attention will be focused on the impact of rising rates as the Bank of Canada looks to continue raising borrowing costs to head off high inflation. Analysts are looking ahead for signs the rate of growth in banks’ lending could be starting to slow as rising interest rates and economic turmoil begin to eat into demand for mortgages and other new loans.

Overseas, the pan-European STOXX 600 fell 0.64 per cent by midday, off early morning lows. Britain’s FTSE 100 slid 0.14 per cent. Germany’s DAX and France’s CAC 40 were down 0.89 per cent and 0.90 per cent.

In Asia, Japan’s Nikkei finished off 0.94 per cent. Hong Kong’s Hang Seng lost 1.75 per cent.


Crude prices steadied in early going as economic concerns and worries about the impact of COVID-19 restrictions in China offset tight global supply.

The day range on Brent is US$111.70 to US$113.30. The range on West Texas Intermediate is US$108.61 to US$110.54. Brent saw a modest gain on Monday while WTI was flat on the session.

“Oil prices moved sideways once again overnight, trading in relatively narrow ranges as China growth fears cap the upside of prices, while the Ukraine conflict and the refined petroleum product supply squeeze in the U.S. support the downside,” OANDA senior analyst Jeffrey Halley said in an early note.

Fears of a global recession continue to spark concern among traders. International Monetary Fund Managing Director Kristalina Georgieva said she did not expect a recession but the prospect also wasn’t off the table.

Asked at a panel at the World Economic Forum whether she expected a recession, Ms. Georgieva said: “No, not at this point. It doesn’t mean it is out of the question.”

Prices, meanwhile, were underpinned by expectations of strong demand as the U.S. heads toward the Memorial Day weekend and the likelihood of increased travel.

In other commodities, gold prices were higher as the U.S. dollar pulled back.

Spot gold was up 0.3 per cent at US$1,858.19 per ounce by early Tuesday morning, after rising to its highest since May 9 of $1,865.29 on Monday.

U.S. gold futures rose 0.4 per cent to US$1,854.40.

“The technical picture continues to remain supportive, and it seems only a marked U.S. dollar recovery will cap gold’s rally,” Mr. Halley said.


The Canadian dollar was lower amid tentative global risk sentiment while its U.S. counterpart hit its weakest level against a group of currencies in nearly a month.

The day range on the loonie is 78.04 US cents to 78.40 US cents.

There were no major Canadian economic releases on Monday’s calendar. Investors will get a reading on March retail sales from Statistics Canada on Thursday. Early estimates suggest a gain of 1.4 per cent for the month.

On world markets, the U.S. dollar index fell 0.3 per cent to 101.79, its lowest level since April 26, according to figures from Reuters.

The euro was up 0.4 per cent at US$1.0729 in early London trading after ECB chief Christine Lagarde said interest rates were likely to be in positive territory by the end of the third quarter.

In bonds, the yield on the U.S. 10-year note was down at 2.81 per cent in the predawn period.

More company news

Zoom Video Communications Inc raised its full-year adjusted profit forecast on Monday, betting on robust demand from large businesses in a hybrid work environment. Revenue from Zoom’s high-paying enterprise customers jumped 31 per cent in the first quarter, representing 52 per cent of its total revenue, the company said.

Broadcom Inc is in talks to acquire cloud service provider VMware Inc in a US$60-billion deal which would further diversify the chip manufacturer’s business into enterprise software, people familiar with the matter told Reuters. Broadcom is in discussions to pay about US$140 per share in cash and stock for VMware, the sources said.

Vacation rental company Airbnb Inc will shut down all listings and experiences in mainland China from July 30, it said on Tuesday, joining a long list of Western internet platforms that have opted out of the Chinese market. The company made the announcement on its official WeChat account without elaborating on the reasons behind the decision. The San Francisco-based company said Chinese users would still be allowed to book listings and experiences abroad.

Best Buy Co Inc cut its full-year profit forecast on Tuesday, joining other major U.S. retailers to warn of an inflation hit, even as the electronics seller reported better than feared sales in the early part of the year. “Macro conditions worsened since we provided our guidance in early March which resulted in our sales being slightly lower than our expectations. Those trends have continued into Q2 and, as a result, we are revising our sales and profitability expectations for the year,” Best Buy CEO Corie Barry said.

Economic news

(9:45 a.m. ET) S&P Global PMIs for May.

(10 a.m. ET) U.S. new home sales for April. The Street is forecasting an annualized rate decline of 1.7 per cent.

(12:20 p.m. ET) U.S. Fed Chair Jerome Powell makes welcoming remarks to the National Center for American Indian Enterprise Development 2022 Reservation Economic Summit

With Reuters and The Canadian Press