Equities
Global shares were mixed Tuesday ahead of a second day of trade talks between the U.S. and China. Initial relief over Europe’s 15-per-cent levy dissipated as leaders in France and Germany said the trade deal was a drag on growth, pulling down stocks and bond yields across Europe.
Trump also raised a “world tariff” rate of 15 to 20 per cent on all trading partners not negotiating a deal, among the highest rates since the Great Depression of the 1930s.
“While the worst case scenario was averted, the implied EU tariff increase from 1% in January is a significant tax increase on EU exports,” wrote economists from JPMorgan in a note.
“This is a very big shock that unwinds a century of U.S. leadership in global free trade,” they warned. “While we no longer see a U.S. recession as our baseline from this shock, the risk is still elevated at 40 per cent.”
“Aside from addressing economic imbalances, tariffs are also now well entrenched in the geo-political arena,” Tan Boon Heng of the Asia & Oceania Treasury Department at Mizuho Bank said in a commentary.
Wall Street futures pointed to a buoyant open ahead of earnings reports from several companies and the U.S. Federal Reserve’s policy meeting later in the day.
In Canada, investors are getting results from Algoma Steel Group, George Weston, Intact, Trican Well Service and Precision Drilling.
On Wall Street, markets are watching earnings from Visa, Procter & Gamble, UnitedHealth Group, AstraZeneca, Merck & Co, Booking Holdings, Boeing, Spotify, Starbucks, Modelez International, Royal Caribbean Cruises, United Parcel Service, Paypal, Norfolk Southern, Corning, Stellantis and Avis Budget.
Overseas, the pan-European STOXX 600 was up 0.44 per cent. Britain’s FTSE 100 was up 0.51 per cent, Germany’s DAX was up 1.15 per cent and France’s CAC 40 was up 1.22 per cent.
In Asia, Japan’s Nikkei fell 0.79 per cent to 40,674.55, while Hong Kong’s Hang Seng dropped 0.6 per cent to 25,398.83.
Commodities
Oil prices were steady on Tuesday.
Brent crude futures were up 22 cents, or 0.3 per cent, at US$70.26 a barrel at 1218 GMT, having touched their highest since July 18, while U.S. West Texas Intermediate crude was at $66.98, up 27 cents, or 0.4 per cent.
Priyanka Sachdeva, senior market analyst at brokerage Phillip Nova, said: “The likelihood of an economic slowdown and the Federal Reserve’s potential rate cuts remain uncertain, limiting the upside in oil.”
In other commodities, spot gold was roughly flat at around $3,316 per ounce.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 72.57 US cents to 72.83 US cents in early trading.
The U.S. dollar index, which weighs the greenback against a group of currencies, was up 0.4 per cent to 99.03.
The euro slid 0.47 per cent to US$1.1537. The British pound was down 0.17 per cent to US$1.3332.
In bonds, the yield on the U.S. 10-year note was last down at 4.385 per cent.
Other corporate news
AstraZeneca AZN-Q beat second-quarter revenue and profit expectations amid strong demand in the U.S., where it has invested $50 billion to expand amid tariff threats from Washington.
Air Canada AC-T reported a drop in second-quarter profit on Monday, weighed down by weak passenger traffic to its key U.S. market amid strained trade relations between the two countries.
Celestica Inc. CLS-T continued in the second quarter to benefit from surging demand from tech giants.
Economic news
ECB 3-year CPI expectations and Germany retail sales for June
830 am ET: U.S. goods trade deficit for June. Consensus is $98 billion.
830 am ET: U.S. wholesale and retail inventories for June
9 am ET: U.S. S&P corelogic Case-Shiller home price index plus FHFA house price index.
10 am ET: U.S. Conference Board consumer confidence index.
10 am ET: U.S. job openings and labor turnover survey
Earnings include: Visa, Procter & Gamble, UnitedHealth Group, AstraZeneca, Merck & Co, Booking Holdings, Boeing, Spotify, Starbucks, Modelez International, Royal Caribbean Cruises, United Parcel Service, Paypal, Norfolk Southern, Corning, Stellantis, Avis Budget, Precision Drilling, Algoma Steel Group, Intact, George Weston, Trican Well Service
With Reuters, the Associated Press and The Canadian Press