Equities in Canada’s main stock index were fairly flat at Tuesday’s opening bell, after signs of rising U.S. inflation raised bets of a faster withdrawal of policy support by the Federal Reserve.
The S&P/TSX Composite inched higher 3.04 points to begin Tuesday trading at 20,751.49.
The Canadian dollar slid 0.10 cents at 78.03 cents U.S.
Bank of Nova Scotia announced it will pause its plan for employees working remotely to return to its Toronto head office starting on Jan. 17, as concerns mount about the virus variant. Scotiabank shares climbed 49 cents to $86.39.
BMO cut the price target on Copper Mountain Mining to $4.50 from $4.75. Copper Mountain shares handed back five cents, or 1.5%, to $3.24.
UBS initiates coverage on Definity Financial with a neutral rating, and a $28.00 price target. Definity shares grabbed 18 cents to $26.97.
Canaccord Genuity initiates coverage on Coveo Solutions with a buy rating, $18.00 price target. Coveo shares grew 15 cents to $16.50.
COVID-19 cases in Canada could see a swift rise in the days to come due to community spread of Omicron, mirroring the situation in Ontario.
Prime Minister Justin Trudeau's government will outline new fiscal and economic forecasts in a document to be released Tuesday as inflation surges and as business groups and opposition politicians call for more spending restraint.
The Bank of Canada on Monday unveiled an agreement with the federal government to keep its inflation target unchanged at 2%, adding that it would now take labour market factors into account as well, which could keep interest rates low for longer in times of crisis.
ON BAYSTREET
The TSX Venture Exchange faded 10.74 points, or 1.2%, to 882.84.
Eight of the 12 TSX subgroups were lower in the first hour, with communications down 0.6%, utilities off 0.5%, and consumer staples lower by 0.4%.
The four gainers were led by industrials, up 0.4%, while consumer discretionary and financial stocks each tacked on 0.3%.
ON WALLSTREET
U.S. stocks slipped during morning trading Tuesday as new inflation data continued to show a sharp rise in prices.
The Dow Jones Industrials gained 49.97 points to 35,700.92, boosted by bank stocks.
The S&P 500 index ditched 18.78 points to 4,650.19.
The NASDAQ plunged 133.35 points at 15,279.29.
Tesla shares were among the biggest early droppers on the S&P 500, falling 2.3% after CEO Elon Musk announced that that he has sold another $906.5 million in shares.
Fellow automaker Ford also fell, down 2.7% following news that by 2030 Toyota would be investing $35 billion into battery-powered electronic vehicles, a space where Ford has sought to establish itself as a leader.
On the other hand, bank stocks rose along with interest rates, with Goldman Sachs and JPMorgan Chase each adding more than 1%.
On the COVID front, Pfizer announced that its drug aimed at treating patients with the virus proved effective in a final analysis, including against the new omicron variant.
The downfall for stocks comes after the November reading for the producer price index showed a year-over-year increase of 9.6%, the fastest pace on record and above the 9.2% expected by economists, according to Dow Jones. The index rose 0.8% month over month, above the 0.5% expected.
The hotter-than-expected inflation reading comes as the Federal Reserve also kicks off its two-day meeting on Tuesday. The central bank will release a statement on Wednesday with quarterly projections for the economy, inflation and interest rates.
Prices for 10-year Treasurys fell, raising yields to 1.47% from Monday’s 1.42%. Treasury prices and yields move in opposite directions.
Oil prices dipped $1.09 to $70.20 U.S. a barrel.
Gold prices let go of $15.80 to $1,772.50 U.S. an ounce.
