Before Bell: What Every Canadian Investor Needs To Know Today



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Wall Street futures rose on Wednesday morning after US President Donald Trump indicated that trade talks with China continue and that he will not raise rates before a deal. World markets have stabilized with the news even as British PM Theresa May faces a vote of disbelief over her Brexit deal. At Bay Street, futures were positive as oil prices advanced in a decline in US crude stocks.

Before the opening bell, Dow futures increased by three digits. In an interview with Reuters, Trump said talks with China are taking place over the phone and that tariffs on Chinese imports will not be increased until he is sure about an agreement. He also suggested that he could intervene in the case of the US Department of Justice against the chief financial officer of Huawei Technologies if this would serve national security interests or help close a trade agreement. The Huawei CFO, Meng Wanzhou, was released after 10 days in Vancouver on bail of $ 10 million. She must also remain in the Vancouver area under 24-hour surveillance.

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The MSCI index of all countries rose 0.5%, with European markets opening up and Asia ending on a positive note.

Abroad, the pound was down 20 months after May said it would face a challenge to its leadership with "everything I have". May faces a vote of confidence on Wednesday. She could be forced out if one of the 315 lawmakers voted against her. Ms. May argued that a new leader would not be able to renegotiate a withdrawal from Brexit and obtain legislation through Parliament until March 29, which means a delay or even a halt in the exit process. (Just over an hour before the opening, Reuters reported that 158 ​​conservatives publicly indicated their support for Ms. May.)

"From the investors' point of view, this is extremely undesirable, even if it is due to the level of uncertainty surrounding the negotiations, not to mention the future relationship and the post-March 29 economy," said Craig Erlam, an analyst at OANDA . "The pound is surprisingly right in the middle of it all, although it flirts below $ 1.25 a night. A defeat for May may see this temporary support breaking dramatically as Brexit's prospect of non-trading increases. "

In corporate news, some of Canada's largest bread retailers and breadmakers are in court on Wednesday asking for a postponement of a class action lawsuit claiming they overloaded consumers by about $ 5 billion by fixing the price of bread. Marina Strauss, of the Globe, reports that the price-fixing scandal came a year ago after Loblaw Cos. Ltd. and its parent George Weston Ltd., owner of bread maker Weston Foods, revealed that they had struck an agreement with the Federal Department of Competition. to avoid criminal charges for his role in the alleged conspiracy to fix bread prices between 2001 and 2015. Wednesday's request for a delay is being challenged by two consumers who are trying to file suit on behalf of Canadian consumers.

On Wall Street, China's music-based music company Tencent Music Entertainment Group said it had raised almost $ 1.1 billion in its initial public offering in the United States after pricing its shares in the lower range of the target range . Tencent priced its American Depositary Receipts (ADRs) at $ 13 per share, in the lower range of $ 13- $ 15 per share, it said in a statement to the Hong Kong stock exchange. The IPO values ​​Tencent at $ 21.3 billion. The company is scheduled to begin trading on Wednesday on the New York Stock Exchange under the symbol TME.

In Europe, markets have increased with the latest market news, with the STOXX 600 advancing 0.94% with inventories of trade-sensitive features among the best performers. Britain's FTSE rose 1.12 percent, with the country's leadership now in focus. News of Wednesday's no-confidence charge initially hurt the British pound, although the currency has rebounded a bit after Ms. May has promised to fight to continue. Germany's DAX rose 0.97 percent and France's CAC 40 gained 1.60 percent.

In Asia, easing trade tensions between the United States and China helped boost markets, with Japan closing at 2.15%, aided by reports that China was moving to reduce tariffs on US cars. Hang Seng, from Hong Kong, gained 1.61%. The Shanghai Composite Index finished 0.31 percent higher.

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Commodities

Oil prices continued to advance in a fall in US inventories and the impact of a cut on OPEC member Libya's exports. Going into the North American market, Brent crude rose more than 1%, with a range of $ 60.46 to $ 61.43. West Texas Intermediate was also larger and had a range of $ 51.91 to $ 52.80 per day.

The sentiment was reinforced by figures released on Tuesday by the American Petroleum Institute showing that US oil stocks fell 10.2 million barrels last week. The decline was more than analysts expected. The U.S. Energy Information Administration releases its weekly inventory numbers on Wednesday morning.

Libya's decision to declare major force on exports of its biggest oil field over the weekend, after the facility was seized by a group of militiamen, also helped to sustain prices.

"There was also a renewed optimism that OPEC cuts could rebalance markets as traders began to digest how cuts in Opec's supply would be implemented after Saudi Arabia plans to cut output to about 10.2 million barrels a 900,000 per day as of November. " commitment to a reduction of at least 50,000 barrels per day, "said Stephen Innes, an analyst at OANDA. "… While the number of Russia is not eye-opening, I think on that front; Something is better than nothing. "

Gold prices, meanwhile, rose despite a firmer dollar in the US and the stock market rebound. Spot gold rose 0.1 percent to $ 1,244.51 per ounce in the middle of the morning in Europe, while US gold futures rose 0.2 percent to $ 1,249.90 per ounce.

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"The fact that we are seeing some risk of going back to the market: stocks are rising, the dollar is rising and the yen is weaker, eliminating part of the demand for gold. But overall, it's relatively well, but it's missing a chance to rise further, "Ole Hansen, an analyst at Saxo Bank, told Reuters.

Coins and Bonds

The Canadian dollar rose as its North American counterpart marked its third day of gains driven by rising US bond yields ahead of the Federal Reserve's decision on interest rates. Before the open, the loonie was a little firmer, not far from the top of the range from 74.64 cents to 74.80 cents. Rising crude prices helped bolster the loonie, although the lack of major Canadian economic reports on Wednesday suggests the currency will be at the mercy of broader markets.

"WTI oil prices rose nearly 2 percent to $ 52.6, holding the US dollar at $ 1.338 (74.74 cents)," said Sal Guatieri, senior economist at BMO. "Canadian oil prices came back with enthusiasm, with the Western Canadian Select at around $ 41 per barrel, and now less than $ 12 below the WTI, compared to a normal long-term spread of about $ 17 ".

In the world currency markets, the dollar index rose 0.2%, with 97.41%, sustained by the decrease of commercial tensions and interest rate differentials.

The pound, on the other hand, fell below $ 1.25 on news of the vote of confidence, but then found some support in Ms. May's pledge to fight for her position.

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"Still, the novel that is Brexit continues and it seems that with every passing day the chaos is being increased, which is starting to hurt the currency," Erlam said in an opening note. "The pound fell below $ 1.25 against the dollar on Tuesday for the first time since April last year and in the short term – unless May comes home waving a concession – it's hard to build an optimistic case or the currency.

In securities, the yield on the US 10-year note was over 2.886 percent. The yield on the 30-year note was also modestly higher, at 3.139%.

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Canadian Cannabis Company Aphria Inc. On Wednesday, the company entered into a supply agreement with the Paraguayan pharmaceutical company Insumos Medicos SA After the closure of the business, Paraguay will be the third market in Latin America, after Argentina and Colombia, where Aphria products will be distributed .

Bausch Health Companies Inc.– formerly Valeant – said it had struck a deal to buy certain assets of Synergy Pharmaceuticals Inc. for about $ 200 million. Synergy is a biopharmaceutical company focused on the development and commercialization of gastrointestinal therapies. Synergy shares rose 12% in premarket trading.

Johnson & Johnson On Wednesday, the drug Tremfya was more effective than a rival drug of Novartis AG and reached the main goal of an advanced study in adults with moderate to severe plaque psoriasis. The study, which involved 1,048 participants, showed that Tremfya was superior to Novartis' Cosentyx in reducing the severity and area of ​​the body affected by the disease, which causes dry, scaly, and itchy skin patches, said J & J. J & J shares rose slightly in the pre-market negotiations.

Actions of Lululemon Athletica rose more than 2 percent in the premarket after Citigroup raised it to "buy" from "hold."

More reading:

Wednesday's small capitalization shares to watch

Updates and downgrades from Wednesday's analysts

Economic news

Statistics Canada says its industries operated at 82.6 percent of capacity in the third quarter, down from 84.1 percent in the previous quarter. The decline follows five consecutive quarterly increases.

The US consumer price index rose at an annual rate of 2.2% in November, matching market forecasts.

With Reuters and The Canadian Press

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