Before Bell: What Every Canadian Investor Needs To Know Today



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US stock markets rose earlier on Tuesday, with reports of ongoing talks between the United States and China over its fragile trading relationship, helping to calm a hectic market. Global stocks have also tried an attempt to recover against a fall of fears of global growth and uncertainty about Britain's exit from the European Union. Bay Street futures were higher in the country, as oil prices rebounded from losses from the previous session, helped by more stable stock markets and a disruption in supply in Libya.

After a violent session on Monday, when the Dow dropped more than 500 points at one point before the day ended modestly, Dow, the leading indicators of the US market were all positive, with Dow futures rising by three digits. On the world stage, the MSCI index of all countries rose 0.1%, threatening to end a series of five days of losses. Markets in Europe were higher in morning trade. Asian markets ended up mixed, taking the lead in Monday's volatile session on Wall Street.

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"The slightest indication of bad news is resulting in an exaggerated settlement," said Jasper Lawler, head of research at the London Capital Group, in a statement. "The upward reversal we saw [in U.S. stocks on Monday] is a bullish signal even in the short term and is boosting European futures. However, this is unlikely to be sufficient to break with a long-term downward trend. "

Market sentiment continues to feel the impact of concerns about the slowdown in global economic growth and the tenuous trade relations between the United States and Canada. In recent developments, China's Deputy Prime Minister Liu He spoke with US Treasury Secretary Steven Mnuchin and trade representative Robert Lighthizer, exchanging views on the next stage of the talks. British Prime Minister Theresa May's decision Monday to postpone a major parliamentary vote on her Brexit deal has also heightened market uncertainty as well as harming the British pound, which jumped to $ 1.2505 immediately after the announcement. Sterling was struggling around $ 1.2571 early Tuesday.

In corporate news, Cenovus Energy has announced its investment plans for next year, saying it expects to cut spending by 4 percent by 2019. The company says it plans to spend $ 1.2 billion to $ 1.4 billion next year with most of the investments. money going to its oil sands operations Foster Creek and Christina Lake. "We remain focused on meeting our commitments to shareholders," Cenovus CEO Alex Pourbaix said in a statement. "With our low-cost base and strong operations, we have already set the standard for performance for the on-site bituminous sands industry."

Meanwhile, Enbridge Inc., which holds its investor on Tuesday, has reaffirmed its 10% annual growth guidance by 2020. Enbridge also announced a 10% increase in dividends to 2019.

On Wall Street, shares of Ford Motor Corp. and General Motors rose about 2 percent following a Bloomberg report that China is moving toward cutting tariffs on cars imported from the United States. US President Donald Trump said China agreed to this move during a meeting at the recent G-20 summit in Argentina. Bloomberg reports that a proposal to cut fares on cars made in the United States to 15%, 40%, has been submitted to China's cabinet. The Bloomberg report cites sources familiar with the matter.

Abroad, European markets – which sold heavily on Monday – were higher on the morning trading session, with the STOXX 600, of the pan-European stock exchange, up 1.45%. The news that trade representatives from the US and China were still in communication helped boost markets with resource stocks – which are particularly sensitive to the evolution of trade with China – among the winners. Britain's FTSE 100 gained 1.08 percent. Germany's DAX rose 1.46 percent and France's CAC 40 gained 1.52 percent.

In Asia, markets ended up more mixed after the volatile session of Wall Street. The Shanghai Composite Index rose 0.37 percent. Hang Seng, of Hong Kong, rose 0.7%. The Japanese Nikkei fell 0.34%. The broader Topix fell 0.91%.

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Commodities

Raw prices were higher initially, aided by an unplanned supply disruption in OPEC member Libya. Brent and West Texas Intermediate were both positive ahead of the US opening with Brent trading in a range of days of $ 59.91 to $ 60.54. The WTI ranged from $ 50.70 to $ 51.48. A day earlier, crude oil prices returned much of last week's gains after OPEC, with Brent down about 3 percent.

"The momentum of the OPEC + [didn’t] the price of oil lasted long, with Brent and WTI being traded back close to their lows before the meeting, "said Craig Erlam, an analyst at OANDA. "If this is a case of under-exploration of the agreement compared to market expectations, doubts about its ability to reduce oversupply or group delivery capacity, prices are again vulnerable and a drop below $ 58 in Brent and $ 50 in WTI could be the catalyst for another wave of sales. "

On Tuesday, prices rose with news of a production stoppage in Libya, where the National Oil Company declared force majeur on Monday over exports from the El Sharara camp, the largest seized by a group of militiamen. However, gains were limited by persistently volatile stock markets.

Gold prices, meanwhile, fell earlier on Tuesday as the US dollar softened ahead of the Federal Reserve's decision on interest rates. Markets are looking for the Fed to suggest a slowdown in their rate hikes in the new year. Spot gold rose 0.2 percent to $ 1,247.38 per ounce in the middle of the morning in Europe. On Monday, gold hit its highest value in nearly five months at $ 1,250.55 in the previous session. US gold futures contracts were up 0.3% at $ 1,252.90 per ounce.

"I remain optimistic about Gold a week before a Fed meeting where the rate hike is no longer the guarantee it looked like a few weeks ago and the central bank is expected to adopt a less aggressive tone than it has for some time, . Mr. Erlam said. "The only thing that seems in its path is a collapse in the negotiations between the US and China and / or the United Kingdom and Europe."

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Coins and Bonds

The Canadian dollar was little changed as oil prices stabilized and its North American counterpart lost altitude relative to a basket of world currencies. The range of days in the loonie so far is 74.51 cents to 74.68 cents. RBC's Elsa Lignos said in a preliminary note that a scenario of unstable risk and weaker oil prices during Monday's session kept pressure on the loonie.

The loonie weaker on Monday after a sharp rise last week at better-than-expected prices with a negative spread in Canada's two- and five-year yields turning negative for the first time since 2007. The yield of five years fell 0.6 points below the two-year yield. A negative yield curve is generally seen as an early warning of more difficult economic times ahead.

In world currencies, the US dollar index fell 0.3% to 96,952, after rising 0.75% during the previous session. Reuters notes that at one point during the night the index fell to 96,364, the lowest since November 22. The US dollar is under pressure ahead of the Fed's meeting next week, with analysts expecting the central bank to attack more dovish tone in future rate hikes. Fed officials have already signaled a possible slowing of increases next year, suggesting rates are approaching neutral levels.

The British pound, which was hammered on Monday by the chaos surrounding Prime Minister Theresa May Brexit's agreement, fell by 20 months after Ms. May sought support from European leaders to change the deal. Ms. May has met with Dutch Prime Minister Mark Rutte and will meet with German Chancellor Angela Merkel in an attempt to salvage the deal ahead of an EU summit later this week. The pound rose 0.4 percent to $ 1.2615 after falling 1.6 percent against the US dollar on Monday to $ 1.2507.

In securities, the yield on the US 10-year note was over 2,883 percent. The yield on the 30-year note was also higher than 3.143 percent.

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Actions set to see action

Athabasca Oil Corp. Athabasca says the deal will raise the company's liquidity, reduce debt and improve financial resilience. The company has entered into a $ 265 million deal to sell its Leismer Pipelines and Cheecham storage terminal to Enbridge. In the statement, Athabasca also said it is cutting its parent team by 25% immediately and executives are reducing payment by 10%. The company also said it is implementing a minimum capital program for 2019, focusing on maintaining base production until market fundamentals improve.

Tim Kiladze of The Globe reports that a leading debt rating agency is warning Hydro One Ltd. after Washington quoted the Ontario government's policy interference in rejecting the company's first major takeover. Standard & Poor's, which has already downgraded the company's credit rating once, said in a report that it could lower it again "if the Ontario government intervened more [Hydro One’s] business decisions or operational decisions, resulting in additional governance deficiencies that we consider to be serious. "S & P has a less-A rating on debt after cutting it from an A rating in September. A lower rating usually means higher borrowing costs.

The CEO of Alphabet Inc. They face an interrogation by US lawmakers about how the Web search giant has dealt with an alarming violation of data and whether this can double the Chinese government's censorship requirements. Chief Executive Sundar Pichai comes to the House Judiciary Committee Tuesday after angering members of a Senate panel in September by refusing to testify about government manipulation of online services foreigners. Pichai's failure to appear at this hearing was marked by an empty chair for Google, along with Facebook and Twitter executives. In a written statement to the House Judiciary Committee, released on Monday, CEO Sundar Pichai said he led the company "without political bias." "We work hard to ensure the integrity of our products and put a series of checks and balances in place to ensure they continue to live up to our standards," said Pichai's testimony. "I lead this company without political bias and work to ensure that our products continue to operate in this manner. To do otherwise would run counter to our fundamental principles and our business interests. "

A court in Tokyo rejected Tuesday Nissan Motor the appeal by President Carlos Ghosn to close his arrest after his arrest last month on allegations of financial misconduct. Ghosn has been jailed in Tokyo since he was arrested Nov. 19 on suspicion of conspiring to underestimate his pay in about half of the 10 billion yen ($ 88 million) granted in five years as of 2010. He was officially charged in Monday.

WPP plans to spend 300 million pounds ($ 382 million) over the next three years for the world's largest advertising group to grow, reducing the number of agencies managing and hiring more talent in New York. British owner of the JWT and Ogilvy branches lost 40% of their value last year and was forced to cut their sales and profit forecasts after they lost some key customers and others cut their spending. On Tuesday, the company said it would maintain and prioritize its dividend on repurchases and deals.

Verizon Communications Inc The company expects to charge $ 1.8 billion to $ 2.1 billion in the current quarter for job cuts announced on Monday, the US wireless operator said. The company had said that about 10,400 employees will leave in the middle of next year as part of its voluntary separation program.

MTY Food Group Inc. has signed an agreement to acquire South St. Burger, a chain of gourmet hamburger restaurants. The financial terms of the agreement were not immediately available. The burgers network will join the other MTY banners, including Thai Express, Vanellis, Manchu Wok, Baton Rouge, Pizza Delight and Scores. South St. has 26 franchises and 14 corporate restaurants.

More reading:

Tuesday's small capitalization shares to watch

Analyst updates and downgrades on Tuesday

Economic news

The US Department of Labor says the producer price index rose 0.1% in November from the previous month. This represents a gain of 0.6% in October. Producer prices follow price changes at the factory gate. Wholesale prices increased 2.5% compared to the previous year, the lowest annual increase in 2018. Excluding volatile food and energy categories, US wholesale prices rose by 0.3% in October and 2.7% last year.

With Reuters, The Canadian Press and Associated Press

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