Canada’s main stock index finished flat on Monday, weighed down by declines in the materials and industrials sectors.
The Toronto Stock Exchange’s S&P/TSX Composite index was down 14.62 points, or 0.09 per cent, at 16,420.84.
Materials stocks finished 1.4 per cent lower as gold prices slipped towards one-year lows as the U.S. dollar continued to strengthen against the currencies of key bullion consumers China and India.
Barrick Gold Corp’s shares fell 4.3 per cent after the Canadian miner said its chief executive officer, Kelvin Dushnisky, would quit and take the top job at South African gold producer AngloGold Ashanti Ltd.
Meanwhile, industrial stocks dropped 0.5 per cent. Shares of Canadian National Railway were 0.9 per cent ahead of quarterly results on Tuesday, while rival Canadian Pacific Railway was down 0.2 per cent. Bombardier Inc. slipped 1.4 per cent, while WestJet Airlines Ltd. was down 0.6 per cent.
Top percentage gainers on the TSX included shares of cannabis firms Canopy Growth Corp., which rose 6 per cent, and Aurora Cannabis Inc., which climbed 4.6 per cent.
Wall Street stocks largely rose on Monday as a jump in 10-year bond yields boosted financials and as news of upcoming international trade talks offset the negative impact of the strengthening U.S. dollar on corporate earnings forecasts.
The financial sector rose 1.3 per cent after 10-year U.S. Treasury yields climbed to their highest level in five weeks. The Federal Reserve was seen as likely to continue raising interest rates despite criticism from President Donald Trump.
News of ongoing trade talks helped U.S. stocks edge upward. Mexican President-elect Andres Manuel Lopez Obrador sent Trump a letter urging a quick wrap-up of trade negotiations, and trade officials from Mexico and the United States will meet later this week.
Also, European Commission President Jean-Claude Juncker is scheduled to meet with Trump on Wednesday, though he will not arrive in Washington with a specific trade offer.
“One of the reasons we’re holding tight is rumors that there will be progress made on trade agreements with Europe, as well as the new comments from the president of Mexico,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.
The Dow Jones Industrial Average fell 12.97 points, or 0.05 per cent, to 25,045.15, the S&P 500 gained 5.15 points, or 0.18 per cent, to 2,806.98 and the Nasdaq Composite added 21.68 points, or 0.28 per cent, to 7,841.87.
Still, the effects of international trade tensions weighed as some investors worry that the U.S.-China trade war could spill over to the currency markets. The dispute has sent the dollar higher, and as a result, several U.S. multinationals are reevaluating their currency hedging strategies.
Shares of Illinois Tool Works Inc fell 7.2 per cent, contributing to the S&P 500 industrial sector’s 0.6-per-cent decline. The machinery parts maker slashed its full-year earnings forecast, joining Netflix Inc in blaming the strong dollar for the cut.
The Canadian dollar fell against the greenback on Monday as concerns about excess oil supply overshadowed worries about growing tensions between the United States and Iran and evidence of solid domestic economic growth.
Canadian bond yields climbed in step with other major sovereign yields in the wake of a Reuters report that said the Bank of Japan is debating whether to scale back its easy monetary policy.
Lingering concerns about the renegotiation of the North American Free Trade Agreement (NAFTA) also bogged down the loonie, analysts said.
“Incrementally the news on NAFTA for Canada is getting worse,” said Ilya Gofshteyn, FX and global macro strategist at Standard Chartered Bank in New York.
U.S. President Donald Trump said last Wednesday that Washington might hammer out a trade deal with Mexico and then do a separate one with Canada later, while Canada’s ambassador to the United States still saw a trilateral agreement.
Meanwhile, a spike in Canadian wholesale trade in May, also helped bolster the loonie.
“It looks like GDP is coming relatively firm,” said Mark Chandler, head of Canadian rates strategy at RBC Dominion Securities in Toronto.
Chandler projected Canadian gross domestic product likely grew at a 2.5 per cent to 3.0-per-cent pace in the second quarter.
Canadian wholesale trade grew 1.2 per cent in May, Statistics Canada said on Monday.
The upbeat figure followed strong readings on inflation and retail sales released last week.
The loonie registered a 0.1-per-cent gain against the greenback last week after Trump on Thursday and Friday complained about a strong greenback and the rise in U.S. interest rates.
The U.S. dollar was up 0.2 pe rcent against its Canadian counterpart at $1.3172 after falling as low as $1.3111, according to Reuters data.
Meanwhile, the yield on 10-year Canadian government debt rose over 5 basis points to 2.231 per cent after touching 2.232 per cent, which was the highest since June 15, Reuters data showed.
Oil prices edged lower on Monday as the focus turned to oversupply worries, moving away from escalating tensions between the U.S. and Iran, which had driven prices higher early in the session.
Brent crude oil settled down 1 cent at $73.06 a barrel. U.S. crude was down 37 cents at $67.89 a barrel, down from a session high of $69.31.
The market gave up gains as attention returned to oversupply risk. Saudi Arabia and other large producers are ramping up production to offset losses from Iran that are likely to come with the approach of the November deadline for other countries to comply with U.S. sanctions on crude sales from Iran, said Phil Flynn, an analyst at Price Futures Group in Chicago.
“They’re just continuing to chase from one headline to another,” Flynn said. The market is continuing volatile swings that were seen last week, he said.
U.S. crude inventories at the delivery hub at Cushing, Oklahoma gained in the most recent four days to Friday, according to information supplier Genscape, traders said. On a weekly basis, stockpiles at the hub were expected to fall for the 10th consecutive week, traders said.
The market was also weighed down by concerns about the impact on global economic growth and energy demand of the escalating trade dispute between the United States and its trading partners.
Finance ministers and central bank governors from the world’s 20 biggest economies ended a meeting in Buenos Aires over the weekend calling for more dialogue to prevent trade and geopolitical tensions from hurting growth.
“Downside risks over the short and medium term have increased,” the finance leaders said in a statement.
In Europe, Germany’s DAX fell 0.1 per cent while the CAC 40 in France slid 0.4 per cent. The FTSE 100 index of leading British shares declined 0.3 per cent. Major indexes in Asia finished mixed. Japan’s Nikkei 225 tumbled 1.3 per cent and South Korea’s Kospi dropped 0.9 per cent. Hong Kong’s Hang Seng added 0.1 per cent to 28,256.12. Australia’s S&P-ASX 200 fell 0.9 per cent to 6,227.60.
Reuters and The Associated Press