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Equities
Canada’s main stock index opened down early Monday with energy stocks tracking crude prices lower. On Wall Street, the Dow and S&P 500 both pulled back from record highs at the start trading.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 56.67 points, or 0.28 per cent, at 20,418.75.
In the U.S., the Dow Jones Industrial Average was down 0.23% per cent at 9:34 a.m. ET after opening higher by 21.16 points, or 0.06 per cent, while the S&P 500 was down 0.08 per cent after rising 0.03% at the opening bell.
The Nasdaq Composite gained 0.13 per cent at the opening bell, and was last up 0.10 per cent.
“The big test this week will be whether the rebound in the U.S. dollar and yields we saw last week is sustainable, or was merely a knee jerk response to the surprise of two successive jobs reports, that only just came up shy of the 1-million mark,” Michael Hewson, chief market analyst with CMC Markets U.K., said.
“This week’s [U.S.] CPI and PPI inflation numbers are likely to be the next key test for the U.S. dollar, and more critically for real yields, along with inflation expectations.”
The U.S. inflation numbers will be released on Wednesday morning.
In this country, earnings continue to roll in through the week. Canada Goose and Metro release results on Wednesday. Cineplex and Canadian Tire will report on Thursday.
Elsewhere, Inter Pipeline Ltd. shares will be at the forefront after Brookfield Infrastructure extended the deadline for its takeover bid again on Friday after failing to secure enough shareholder support for the deal.
The Globe’s Tim Kiladze reports that Brookfield has been trying to negotiate a takeover of Inter Pipeline for almost a year, but was initially rebuffed by the target’s board, and is now trying to win over public shareholders. Brookfield has increased its public offer price twice and extended its deadline multiple times, but has yet to secure enough shareholder support.
Before the start of trading, Barrick Gold Corp. reported djusted earnings per share of 29 cents, beating analysts’ estimates of 26 cents, according to Refinitiv IBES. Revenue of $2.89-billion slightly missed estimates of $2.92-billion. Barrick also said it was on track to achieve its full-year production forecast.
Overseas, major European markets were down by afternoon. Britain’s FTSE 100 fell 0.28 per cent. Germany’s DAX fell 0.13 per cent. France’s CAC 40 slid 0.07 per cent.
In Asia, Hong Kong’s Hang Seng gained 0.40 per cent. Markets in Japan were closed.
Commodities
Crude prices dropped in early going, continuing the previous week’s declines, with a stronger U.S. dollar and concerns about a rise in COVID-19 cases in some regions hitting sentiment.
The day range on Brent is US$67.74 to US$70.26. The range on West Texas Intermediate is US$65.22 to US$67.90.
Both benchmarks were down about 4 per cent early Monday. WTI sank about 7 per cent last week, while Brent fell roughly 6 per cent.
“Concerns about potential global oil demand erosion have resurfaced with the acceleration of the Delta variant infection rate,” RBC analyst Gordon Ramsay said in a note.
Reuters reported that China saw 125 new COVID-19 cases on Monday, up from 96 a day earlier. In Malaysia and Thailand, infections hit daily records.
Elsewhere, gold fell it its lowest in four months as the U.S. dollar rallied in the wake of Friday’s strong jobs report.
Spot gold was down 0.9 per cent at US$1,746.80 per ounce. Prices slumped below US$1,700 in early Asia trade but pared some of those losses.
U.S. gold futures shed 0.8 per cent to US$1,748.30.
“With Fed tapering now much likely to start in Q4 after the Friday Non-Farm Payroll data, strengthening the U.S. dollar and lifting U.S. bond yields higher, gold faces some severe structural headwinds,” OANDA senior analyst Jeffrey Halley said in an early note.
Currencies
The Canadian dollar was steady as its U.S. counterpart held not far from its best level in four months against a basket of currencies.
The day range on the loonie is 79.46 US cents to 79.76 US cents.
“The CAD is a relative out-performer on the day by virtue of holding more or less unchanged against the USD despite the sharp fall in crude oil prices and so-so risk appetite,” Shaun Osborne, chief FX strategist with Scotiabank, said.
There were no major Canadian economic releases on Monday’s calendar.
In early European trading, the U.S. dollar index was down 0.1 per cent but still held near its highest level in four months on heels of last week’s strong jobs numbers.
The U.S. dollar also hit a four-month high against the euro, strengthening as far as US$1.1742, according to figures from Reuters.
The U.S. dollar also climbed as high as 110.37 yen, following a 0.4 per cent rally at the end of last week.
More company news
Brookfield Asset Management Inc’s reinsurance unit has agreed to buy insurer American National Group Inc for about $5.1-billion in an all cash deal, the companies said on Monday.
Veoneer Inc. said it would start talks with chipmaker Qualcomm Inc. after its offer for the Swedish auto-parts maker last week topped a rival bid by Magna International Inc. Qualcomm’s offer could “reasonably be expected to result in a ‘Superior Proposal’, as defined under the terms of Veoneer’s merger agreement with Magna,” the board said in a statement.
Asset management company Ritchie Bros said on Sunday it would acquire plant and machinery auction house Euro Auctions for an enterprise value of 775 million pounds ($1.07-billion) in cash. The transaction, which was approved by Ritchie Bros’ board of directors, is expected to close in late 2021 or early 2022.
Economic news
(10 a.m. ET) U.S. Job Openings & Labor Turnover Survey for June.
With Reuters and The Canadian Press