Wall Street looked set to continue its recovery next year on Tuesday as Dow futures rose three-fold as markets awaited the outcome of the latest US-China trade talks. Abroad, Europe's major markets started the day in black, while Asia finished the mixed session. At Bay Street, futures were also firmer as oil prices rose.
"Traders are taking a wait-and-see approach before deciding whether the latest round of US-China trade talks will be productive," said Jasper Lawler, head of research at the London Capital Group. "Both sides are making encouraging comments that they are on the right track and, at the same time, offering some support for the actions that markets know we have been here before."
US Commerce Secretary Wilbur Ross said Monday that "there is a good chance we will have a reasonable agreement with which China can coexist." Meanwhile, China's Foreign Ministry said Beijing had "good faith" to work with the US. States towards a resolution. The policy will also be on the radar on Tuesday when US President Donald Trump will deliver a speech on what he calls a "crisis" on the US border with Mexico. Major US networks will cover the address.
On Bay Street, Barrick Gold Corp. CEO Mark Bristow said in an interview with The Globe and Mail's Niall McGee that the company is evaluating a number of acquisitions opportunities in this country. "If you look at the corporate structure, the biggest gap is the fact that it's under investment in Canada," Bristow said in an interview last week.
Shares of Aurora Cannabis Inc. may also receive some attention after the company said on Tuesday that it expects to release second-quarter revenue between $ 50 million and $ 55 million. Analysts had expected marijuana producer revenue to reach $ 67 million in the quarter ended Dec. 31, according to Thomson Reuters Eikon. Aurora says second-quarter numbers rose from $ 11.7 million over the same period last year and up from $ 29.7 million in the quarter ended September 30. "The results reflect an anticipated revenue growth rate of 327% compared to the second quarter of 2018 and up 68% compared to the first quarter of 2019," Aurora said in a statement.
Abroad, the pan-European STOXX 600 gained 0.92% with most of the highest sectors. Britain's FTSE 100 rose 0.79 percent, while Germany's DAX gained 0.68 percent. France's CAC 40 rose 1.18 percent.
In Asia, the Nikkei of Japan finished 0.82%. The broader Topix advanced 0.39%. Hang Seng, of Hong Kong, rose 0.15 percent, while the Shanghai Composite Index fell 0.26 percent.
Crude prices were higher from the start, backed by optimism over trade talks between China and the United States, as well as the impact of supply cuts by OPEC and its allies. Brent crude steadily gained in the early hours of the morning and had an interval of days of $ 57.13 to $ 58.39. West Texas Intermediate was following a similar course and had an intermission for the day from $ 48.31 to $ 49.35.
"Oil prices also continued the recent recovery of their casualties in December, aided by a weaker dollar, the resumption of China / US. Trade talks, as well as the more positive sentiment surrounding equity markets as well as Saudi Arabia fulfilling their promise last month, have reduced their output, "said Michael Hewson, chief market analyst at CMC Markets UK. Note.
OANDA analyst Dean Popplewell noted that so far this year oil prices have benefited from OPEC cuts and have stabilized stock markets, although an increase in oil supply driven by a sharp increase in drilling and production of shale oil offshore has limited earnings. Energy Information Agency figures said US oil production rose 2 million barrels per day in 2018 to a record 11.7 million barrels per day.
Meanwhile, Reuters reports that S & P Global Ratings said it lowered its average oil price forecasts for 2019 at $ 10 a barrel to $ 55 and $ 50 a barrel for Brent and WTI respectively. "Our lower oil price assumptions reflect slowing demand and increasing supply globally," said S & P Global Ratings analyst Danny Huang.
Gold prices were lower as the US dollar rebounded in the hope that the US and China could settle their trade differences. Spot gold fell 0.4 percent to $ 1,283.43 per ounce. US gold futures were down 0.4% at $ 1,284.50 per ounce.
"Gold is somewhat weakened overnight, and growing optimism about the Sino-US trade deal has pushed the dollar higher as investors' appetite for risk appetite is limiting gains to the dollar." metal of paradise, "said Popplewell.
Coins and Bonds
The Canadian dollar continued to rebound after reaching its best levels in a month as oil prices stabilized. In the last five days, the loonie gained almost 3% against its US equivalent. At the last check, the loonie was sitting near the top of the range from 75.17 cents to 75.37 cents.
The key to the Canadian dollar this week will be the announcement of the Bank of Canada policy on Wednesday morning. The markets are not expecting a rise in interest rates. Instead, the focus will likely shift to the release of the central bank's monetary policy report for clues about future changes.
Before that, the markets get the Canadian trade numbers ahead of the opening bell. (US numbers are also on the calendar, but are likely to be postponed because of the government's partial shutdown in that country.)
Sue Trinh, head of Asian exchange strategy for RBC, says the bank is looking for a trade deficit of $ 1.40 billion in November. The market consensus is expecting a larger trade deficit of $ 2.15 billion, up from $ 1.17 billion in October. In any case, the number would represent the fourth consecutive monthly increase in the deficit.
"The deterioration largely reflects a disappointing pattern of declining-trend exports, with the 0.8 percent drop in nominal exports projected for November, largely reflecting the impact of the fall in global oil prices, with the even more pronounced weakness for Western Canadian production. Trinh said.
In world currency markets, the weakness of the euro helped boost the US dollar, which rose by 0.3% against a group of world currencies to 95,959. The US dollar index has fallen about 2% since the middle of last month. On Monday, it hit a three-month low of 95,638 on rising expectations that the Federal Reserve will pause the rate hikes after comments from Fed Chairman Jerome Powell on last week.
In securities, US Treasury yields rose as trade talks with China reached a positive tone. Yield on the 10-year note was higher at 2,699 percent. The yield on the 30-year note was also higher at 2,986 percent.
Actions set to see action
Samsung Electronics It surprised the market on Tuesday with an estimated 29 percent drop in quarterly profit, blaming weak chip demand on a rare comment issued to "ease confusion" among investors who are already worried about a global slowdown in technology. The South Korean company also said that profit will remain weak in the first quarter due to the difficult conditions of memory chips, but that the market should improve in the second half with customers launching new smartphones.
James Bradshaw of Globe reports Bank of Montreal is creating a new financial crime unit to fight fraud and cyber threats and has hired a former US security official to be its leader. The new unit is being launched at a time when banks face increasing threats from cybercriminals and fraudsters. Less than eight months ago, BMO suffered a data breach that exposed sensitive personal information belonging to up to 50,000 customers. Simplii Financial, a subsidiary of the Canadian Imperial Bank of Commerce, fell victim to the same breach, and although both banks have promised to reimburse customers who have lost funds, the attacks have raised doubts about the extent to which financial institutions can avoid evolving threats.
Canada's largest telecommunications group is receiving mixed reviews for its plan to follow the lead of companies like Google and Facebook in collecting large amounts of information about their customers' activities and preferences. ECBBell Canada began asking its customers in December for permission to track everything they do with their homes, cell phones, internet, television, applications or any other service they receive from Bell or its affiliates.
Swiss Chemicals Company Sika AG agreed to buy French rival Parex in a $ 2.55 billion deal, its biggest acquisition in an attempt to intensify consolidation in the building materials market. Sika, until recently an acquisition target of France's Saint-Gobain, said it was buying Parex from a fund owned by CVC Capital Partners to increase its presence in the mortar and waterproofing business.
Tuesday's small capitalization shares to watch
(8h30 ET) Trade deficit in Canada for November.
(10 am ET) US job openings and labor turnover survey.
(3:00 pm) US consumer credit in November. Consensus is for a reading of $ 14.3 billion.
With Reuters and The Canadian Press
Be smart with your money. Get the latest investment information delivered directly to your inbox three times a week with the Globe Investor newsletter. sign up today.