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Equities
Canada’s main stock index edged higher in early trading, helped by gains in commodities-linked stocks. South of the border, key indexes started on the backfoot despite a better-than-forecast reading on retail sales.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 64.99 points, or 0.3 per cent, at 21,748.07.
In the U.S., the Dow Jones Industrial Average fell 11.27 points, or 0.03 per cent, at the open to 36,076.18.
The S&P 500 opened lower by 3.38 points, or 0.07 per cent, at 4,679.42. The Nasdaq Composite dropped 13.52 points, or 0.09 per cent, to 15,840.32 at the opening bell.
Early Tuesday, the U.S. retail sector was in the spotlight with results from Walmart and Home Depot released before the start of trading.
Home Depot said same-store sales rose 6.1 per cent in the third quarter ended Oct. 31, beating analysts’ estimates of a 1.4-per-cent increase, according to IBES data from Refinitiv.
Walmart, meanwhile, hiked both is full-year sales and profit forecasts. Adjusted profit is now expected to be around US$6.40 per share up from a previous range of US$6.20 to US$6.35.
Shares of Home Depot were up about 4 per cent in early trading while Walmart stock slid shortly after the open.
Investors also got a better-than-forecast reading on U.S. retail sales. The U.S. Commerce Department said sales rose 1.7 per cent in October. Economists had been looking for a number closer to 1.5 per cent. September’s sales gain was also revised higher to 0.8 per cent from the 0.7-per-cent increase reported a month ago.
In this country, Bank of Canada Deputy Governor Lawrence Schembri, is set to speak by videoconference to the Canadian Association of Business Economics around noon. The topic of Mr. Schembri’s remarks will be labour market uncertainties and monetary policy.
On Monday, Bank of Canada Governor Tiff Macklem said in an opinion piece in the Financial Times that Canada will not raise interest rates until the slack in this country’s economy is absorbed. He also said inflation risks have increased but the central bank continues to view recent dynamics as transitory. New Canadian inflation figures are due Wednesday morning.
Overseas, the pan-European STOXX 600 was up 0.25 per cent by midday. Britain’s FTSE 100 slid 0.07 per cent. Germany’s DAX and France’s CAC 40 were up 0.40 per cent and 0.37 per cent, respectively.
In Asia, Japan’s Nikkei finished up 0.11 per cent. Hong Kong’s Hang Seng added 1.27 per cent.
Commodities
Crude prices moved higher in early going as concerns over tight supply helped offset growing worries about a rise in COVID-19 infections in parts of Europe and the imposition of new restrictions.
The day range on Brent is US$81.85 to US$83.14. The range on West Texas Intermediate is US$80.68 to US$81.81.
“The oil market deficit is not going away even as Permian output hits records and that should limit the downward pressure hitting crude prices,” OANDA senior analyst Ed Moya said.
The OPEC+ group has held to its current production schedule in recent months despite pressure from the United States to hike output to help offset high energy costs.
Prices, however, face some downward pressure from news of rising COVID-19 infections in parts of Europe, leading some governments to again consider restrictions to control the spread.
On Monday, Austria imposed a lockdown on unvaccinated people while Germany considers tighter curbs and Britain expands its booster program to younger adults.
In other commodities, gold prices moved higher, holding near a five-month peak, with concerns over rising inflation improving the metal’s appeal as a hedge against price pressures.
Spot gold rose 0.1 per cent to US$1,864.80 per ounce. U.S. gold futures were up 0.1 per cent at US$1,868.20.
“Gold prices are entering wait-and-see mode as investors await any fresh signals that inflation will last hotter for longer,” Mr. Moya said.
Currencies
The Canadian dollar was steady in early going as its U.S. counterpart held close to a 16-month high against the euro.
The day range on the loonie is 79.77 US cents to 80.06 US cents.
“The soft risk mood may be weighing on the CAD somewhat but we are a little surprised that the CAD has not been able to take fuller advantage of the gains in energy prices,” Shaun Osborne, chief FX strategist with Bank of Nova Scotia, said in a note.
For the Canadian dollar, the day’s key event will likely be the noon Bank of Canada speech.
Early Tuesday, Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts fell 5.3 per cent in October to 236,554 units. Urban starts were down 3.7 per cent.
On world markets, the U.S. dollar index was slightly lower at 95.446, after hitting a 16-month high last week on the heels of a hotter-than-expected reading on U.S. inflation.
The green back was just below a 16-month high against the euro, according to figures from Reuters. The euro saw losses during the previous session on dovish comments from European Central Bank chief Christine Lagarde.
Britain’s pound was up 0.4 per cent against the U.S. dollar at US$1.3467, having risen after data showed British employers hired more people in October after the government’s job-protecting furlough scheme ended, Reuters reported.
In bonds, the yield on the U.S. 10-year note was up at 1.628 per cent just before the North American open.
More company news
Tesla CEO Elon Musk has sold US$930-million in shares to meet tax withholding obligations related to the exercise of stock options, U.S. securities filings showed on Monday. Musk sold 934,091 shares after exercising options to buy 2.1 million stocks at $6.24 each on Monday. Tesla shares closed at $1,013.39. He is required to pay income taxes on the difference between the exercise price and fair market value of the shares. This is the second time in a week that the billionaire has exercised his stock option.
Economic news
(8:15 a.m. ET) Canadian housing starts for October.
(8:30 a.m. ET) Canada’s industrial product price index for October.
(8:30 a.m. ET) U.S. retail sales for October.
(8:30 a.m. ET) U.S. import prices for October.
(9:15 a.m. ET) U.S. industrial production for October.
(10 a.m. ET) U.S. NAHB Housing Market Index for November.
(10 a.m. ET) U.S. business inventories for September.
With Reuters and The Canadian Press