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U.S. and Canadian stocks are pointing to a higher open Tuesday after the positive sentiment sent the Dow above the 25,000 mark on Monday for the first time since March.

The Toronto Stock Market was closed Monday for the Victoria Day holiday.

The strong rally on Monday came after Treasury Secretary Steven Mnuchin said that the potential for a trade war between the U.S. and China was “on hold” after the two had reached a deal to suspend tariff threats.

Washington neared a deal to lift its ban on U.S. firms supplying Chinese telecoms gear maker ZTE Corp, sources said on Tuesday, and Beijing announced tariff cuts on car imports, further easing trade tensions between the world’s two largest economies.

In earnings, AutoZone, Toll Brothers and Kohl’s are among the major companies expected to release their latest figures before the opening bell. Hewlett Packard and Intuit are set to release their earnings after the session.

In Toronto, Bombardier stock could be active after suggestions the Caisse de dépôt et placement du Québec may sell its stake in the transportation company after its price has risen.

Bank stocks could also see some action as they kick of the second-quarter earnings season this week.

European shares inched to a near four-month high on Tuesday, as an easing of pressure on Italian markets coincided with China’s latest move to open up its giant economy to the rest of the world.

Britain’s FTSE was up 0.19 per cent, Germany’s DAX gained 0.15 per cent and France’s CAC slid 0.05 per cent.

Overseas, Asian shares skidded on Tuesday as a strong dollar sapped demand for emerging market assets while surging oil prices stoked concerns about a flare-up in inflation and faster U.S. interest rate increases.

Japan’s Nikkei ended 0.2 per cent lower. Sony Corp. said on Tuesday it would pay about US$2.3-billion to gain control of EMI, becoming the world’s largest music publisher in an industry that has found new life on the back of streaming services.

China’s Shanghai was up 0.02 per cent and Hong Kong’s Hang Seng rose 0.6 per cent.

Concerns about U.S. dollar strength offset the boost to sentiment from overnight gains on Wall Street over the apparent reconciliation between the United States and China over import duties.

Analysts said investors in Asia were worried about the growth outlook, with the U.S. Federal Reserve staying on its policy tightening path.

“Stocks have rallied several times on the belief that trade tensions were easing, only to fall back down as investors took the opposite view,” said James McGlew, executive director of stockbroking at Perth-based Argonaut.

“While the global economy remains robust and first-quarter earnings have been strong, stock markets have mostly traded sideways this year because many investors have started to fear that the pace of the expansion has already peaked.”


Commodities

Oil rose towards US$80 a barrel on Tuesday, supported by concern that falling Venezuelan crude output and a potential drop in Iranian exports could further tighten global supply.

Crude is trading at its highest level since late 2014, underpinned by a supply-cutting deal among the Organization of the Petroleum Exporting Countries plus Russia and other non-members, and strong global demand.

Last week, Brent crude, the global benchmark, topped US$80 for the first time since November, 2014. U.S. crude is also trad at its highest level since November, 2014.

Gold edged up on Tuesday from a 2018 low, adding traction as the dollar fell off its five-month high, though risk appetite in the broader financial markets kept the precious metal’s gains in check.

“This quarter and maybe going into next, gold will continue to struggle but the (positive) views on the U.S. economy are overdone,” said Philip Newman, director at Metals Focus.

Silver rose 0.7 per cent to US$16.60 an ounce, while palladium fell 1.4 per cent to US$975.72 an ounce. Platinum climbed 1.2 per cent to US$907.10 an ounce, after marking a low for the year in the previous session at US$873.50.


Dollar

The Canadian dollar was at 78.27 US cents, up slightly.

The U.S. dollar fell on Tuesday from a five-month high, losing momentum after a broad rally prompted by rising U.S. bond yields and relief at an easing in U.S.-China trade tensions.

The dollar’s index against a basket of six major currencies last traded at 93.367, down from a five-month high of 94.058 set on Monday.

The prospect of a resolution to the U.S.-China trade tensions on Monday bolstered the dollar.

U.S. Treasurys were lower as investors awaited the minutes from the Federal Open Market Committee, set to be released Wednesday. They may give a suggestion on where interest rates are heading, and how quickly.

The yield on the U.S. 10-year Treasury was at 3.0726 per cent, while the 30-year yield was higher at 3.2098 per cent.

The Canada 10-year bond was at 2.506 per cent.


Stocks set to move

Bombardier stock could see a reaction to reports that the Caisse de dépôt et placement du Québec may sell its staking in Bombardier Transportation, the train-making division of the Montreal company, as the fund owns a 27.5-per-cent stake. Bombardier’s stock price has doubled over the past year. T he Caisse has profitably exited a number of successful investments in Quebec-based companies in recent weeks.

U.S.-listed shares in Canadian e-commerce software maker Shopify Inc. fell around 2 percent before the bell on Tuesday after Adobe Systems Inc announced it was buying rival Magento Commerce. Magento, which counts CocaCola Co, Intelligentsia Coffee, Canon Inc and Burger King among its customers, helps companies build online stores, competing with Shopify whose software and consulting expertise helps merchants sell everything from infant formula to cosmetics online.

Facebook edged up 0.3 per cent ahead of Chief Executive Mark Zuckerberg’s defense of the company’s data practices to European lawmakers in Brussels. The testimony starts at 12:15 p.m. ET and comes three days before tough new European Union rules on data protection take effect.

Chief Executive Officer Elon Musk said late on Monday that the braking issue on Tesla Inc.’s Model 3 sedan, pointed out by Consumer Reports, can be fixed with a firmware update which the electric car maker will be rolling out in a few days.

Sony Corp. said on Tuesday it would pay about US$2.3-billion to gain control of EMI, becoming the world’s largest music publisher in an industry that has found new life on the back of streaming services. The acquisition is the biggest strategic move yet by new CEO Kenichiro Yoshida and gives Sony a catalog of more than 2 million songs from artists such as Kanye West, Sam Smith and Sia.

U.S. department store chain Kohl’s Corp. topped Wall Street estimates for quarterly profit on Tuesday, as efforts to cut back on discounts and maintain a leaner inventory paid off, helping the company to lift its annual profit forecast. Kohl’s shares rose 5 per cent in premarket trading after the company also reported comparable-store sales above expectations.

Autozone shares rose 2.4 per cent in premarket trading after it reported earnings that topped Wall Street expectations. Revenue was a bit short of expectations but same-store sales rose 0.6 per cent.

Micron Technologies shares rose 6.2 per cent after it announced a US$10-billion stock buyback, its biggest ever, which represents about 16 per cent of its market value.

Earnings expected today include: Hewlett Packard Enterprise Co.; Intuit Inc.; TJX Companies Inc.

Economic news

(8:30 a.m. ET) Canadian wholesale trade for March is released. The Street expects a 0.8-per-cent increase from February.

With files from Reuters


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