Global Cues Point To Gap-up Opening For TSX
Canadian stocks are seen opening sharply higher on Monday as investors react to higher commodity prices and positive developments over a coronavirus treatment.
U.S. stock futures jumped, tracking gains elsewhere across Asia and Europe, as life started to return to normal in China and the U.S. Food and Drug Administration granted emergency authorization for the use of blood plasma to treat hospitalized coronavirus patients.
U.S. President Donald Trump hailed the FDA’s decision and claimed the treatment could reduce the mortality by 35 percent.
Interestingly, the FDA’s emergency authorization comes on the eve of the Republican National Convention, where Donald Trump will be nominated to lead his party for four more years.
Investors also cheered a report in the Financial Times saying that the Trump administration is considering by-passing normal U.S. regulatory standards to fast-track an experimental coronavirus vaccine from the U.K. for use in America ahead of the nation’s upcoming presidential election.
There are also signs of a thaw in U.S.-China tensions, with a Bloomberg report claiming that Trump’s team is privately seeking to reassure U.S. companies that they can still do business with the WeChat messaging app in China.
Oil prices were up around 0.7 percent in European trade as storms in the Caribbean and the Gulf of Mexico on Sunday brought oil production to a halt.
Gold edged higher as the U.S. dollar eased on improved risk appetite, making bullion cheaper for holders of other currencies.
The dollar weakened as investors look ahead to the U.S. Federal Reserve’s annual Jackson Hole meeting later in the week, where Chair Jerome Powell will talk on the Fed’s monetary policy framework review. It is expected that the U.S. central bank will reiterate its pledge for ultra-low rates.
In corporate news, the U.S. unit of diversified Canadian miner Northern Dynasty Minerals has denied a media report suggesting that the Trump administration plans to block its proposed Pebble Mine in Alaska.
The benchmark S&P/TSX Composite Index slid 88.91 points or 0.5 percent to 16,517.85 on Friday, more than offsetting the modest gain posted in the previous session, as lower oil and gold prices pulled down material stocks.
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