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Equities

Canada’s main stock index slid shortly after the opening bell Tuesday with energy stocks weighing. On wall Street, the S&P 500 and Nasdaq both managed early gains, buoyed by news of a deal on U.S. COVID-19 relief.

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At 9:35 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 5.28 points, or 0.08 per cent, at 17,495.61.

In the U.S., the Dow Jones Industrial Average fell 16.25 points, or 0.05 per cent, at the open to 30,200.20.

The S&P 500 opened higher by 3.16 points, or 0.09 per cent, at 3,698.08, while the Nasdaq Composite gained 42.70 points, or 0.34 per cent, to 12,785.22 at the opening bell.

“Markets will be at the mercy of headline-driven risk as liquidity dries up into the holidays,” OANDA senior analyst Jeffrey Halley said.

“But as [Monday] showed, no matter how hard markets try to silence the fear-of-missing-out-lambs, they cannot be silenced.”

Helping steady sentiment was news that U.S. Congress had passed a coronavirus relief and government spending package on Monday night. The new bill offers direct payments to Americans and boosts jobless benefits as the country contends with the latest COVID-19 wave.

Ahead of the opening bell, U.S. investors got the final reading on third quarter GDP, with growth coming in at an annual rate of 33.4 per cent. That was slightly ahead of the 3.1 per cent economists had been forecasting.

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Canadians will have to wait until Wednesday for the next glimpse of how the broader economy is performing, when Statistics Canada releases its report on October GDP.

“The Canadian economy likely expanded 0.2% in October, consistent with Statscan’s initial flash estimate,” BMO senior economist Robert Kavcic said.

“Most key indicators notched gains in the month, with employment, wholesale, housing starts and retail all up, while manufacturing was flat. Notably, this continues the gradual stepping down of monthly growth since peaking during the early rebound in June (each successive month has seen softer growth).”

However, he also noted that the report will be a bit of an “artifact” because it predated the second wave of COVID-19, which has forced restrictions on many parts of the country.

On the corporate side, China’s Shandong Gold Mining on Tuesday said it had terminated an agreement to purchase Canada’s TMAC Resources after the Canadian government rejected the sale on national security grounds.

In a filing to the Shanghai Stock Exchange, Shandong Gold said it received notice from the Canadian ities on Dec. 18 that the deal to acquire TMAC, which operates the Hope Bay mine in the Canadian Arctic, should not go ahead.

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In Europe, the pan-European STOXX 600 gained nearly 1 per cent by afternoon. Britain’s FTSE 100 rose 0.42 per cent. Germany’s DAX added 1.13 per cent. France’s CAC 40 gained 1.10 per cent. European markets were hard hit on Monday as many countries halted flights from Britain amid concerns about a new variant of the coronavirus, which forced the lockdown of London and some other regions.

In Asia, Japan’s Nikkei finished down 1.04 per cent. Hong Kong’s Hang Seng lost 0.71 per cent.

Commodities

Crude prices continued to fall, with Brent dipping below US$50 a barrel, as demand worries persist on concerns over the new mutation of the coronavirus and the impact on travel.

The day range on Brent is US$49.56 to US$50.86. The range on West Texas Intermediate is US$46.60 US$47.96. Both were down more than 1 per cent in the predawn period. Brent and WTI lost about 3 per cent during Monday’s session.

The detection of the new variant prompted several countries to close their borders to Britain, although a British minister said the U.K. and France are working to reopen one of Europe’s most important trade routes. Canada was also among the countries halting flights from Britain.

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“Unfortunately, for energy bulls, crude oil is the favoured downside pawn often in play when lockdown headlines hit,” Axi chief global market strategist Stephen Innes said.

“Even on oil, I think the sell-off could be limited due to reflationary expectations via the vaccine,” Mr. Innes also said in an early note.

Later Tuesday, markets will get the first of two weekly U.S. inventory reports when the American Petroleum Institute releases its latest tally. Analysts are expecting the numbers to show that crude stocks fell by more than 3 million barrels last week.

Gold prices fell on Tuesday, hurt by a stronger U.S. dollar.

Spot gold fell 0.3 per cent to US$1,871.04 per ounce, U.S. gold futures dropped 0.5 per cent to US$1,873.60 per ounce.

Currencies

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The Canadian dollar was modestly lower as its U.S. counterpart strengthened against a group of world currencies.

The day range on the loonie is 77.59 US cents to 77.86 US cents.

“Mixed stocks and softer energy prices cloud the CAD mood somewhat but we think the consolidative tone in the USD generally is perhaps reflected in the near-term prospects for USD/CAD,” Shaun Osborne, chief FX strategist with Scotiabank, said.

“We think scope for corrective USD gains remains rather limited, however.”

There were no major Canadian releases scheduled for Tuesday.

On world markets, the U.S. dollar index, which measures the currency’s strength against a basket of counterparts, rose 0.16 per cent to 90.279 after the U.S. Congress agreed on a new U.S. stimulus package.

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“The forex market continues to trade on a transactional basis, which means feeding corporate orders in the machine or using the flow to match the internal year-end risk,” Axi’s Stephen Innes said. “For the most part, the prop desk guys are either on vacation or ‘on-call’ if needed.”

The euro was down 0.31 per cent at US$1.2209 while Britain’s pound lost 0.33 per cent at US$1.3422, recovering some ground after a falling as much as 2.5 per cent during the previous trading session, according to figures from Reuters.

The British currency was also flat at 90.95 pence against the euro after seeing heavy losses on Monday.

More company news

CAE Inc. says it has acquired Merlot Aero Ltd., a flight crew management software company, in deal worth at least US$25 million. Under the agreement, CAE is paying US$25-million, plus up to an additional US$10-million in the form of an earn-out. CAE says the deal helps grow its business beyond pilot training.

Apple Inc is moving forward with self-driving car technology and is targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology, people familiar with the matter told Reuters. The iPhone maker’s automotive efforts, known as Project Titan, have proceeded unevenly since 2014 when it first started to design its own vehicle from scratch. At one point, Apple drew back the effort to focus on software and reassessed its goals. Doug Field, an Apple veteran who had worked at Tesla Inc, returned to oversee the project in 2018 and laid off 190 people from the team in 2019.

Exercise bike maker Peloton Interactive Inc said on Monday it would buy peer Precor in a deal valued at $420-million, as it looks to boost its market share for fitness products. Demand for streaming exercise services and btcc交易所官网home work-out equipments soared during the COVID-19 pandemic, with gyms and fitness clubs closed across the United States for several weeks.

Economic news

(8:30 a.m. ET) U.S. real GDP for Q3. Consensus is an annualized rate rise of 33.1 per cent.

With Reuters and The Canadian Press

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