Goldman Sachs expects Nvidia ’beat and raise,’ lifts price target to $240
Investing.com - Canada’s main stock exchange was higher on Tuesday, ahead of the Federal Reserve latest policy-setting meeting, which is expected to result in more monetary easing.
S&P/TSX Composite is up by 143 points or 0.48% at 30,419.68
The index slumped by 0.3% to end at 30,275.76 on Monday, despite gains in the U.S. markets, with a drop in gold below the $4,000-per-ounce market dented sentiment.
On a sector basis, materials, which includes metal mining shares, shed 3.2%, pulled down in particular by a 5% dip in shares of Agnico Eagle Mines.
U.S. stock index at record high
U.S. stock extended gains from record levels ahead of the start of Federal Reserve latest policy-setting meeting.
At 4:00 p.m. ET (20:00 GMT), the dow jones industrial average traded 173 points, or 0.4% higher, the S&P 500 index gained 0.4%, and the Nasdaq composite gained 0.8%. The three main averages on wall street closed at all-time highs.
The main averages on Wall Street notched an all-time high record close for the second consecutive session on Monday, with hopes rising that the planned meeting of Presidents Donald Trump and Xi Jinping this week will yield a sustainable cooling in tariff-fueled U.S.-China tensions.
Fed to start latest meeting
The Fed starts a two-day policy meeting later in the session, and is widely expected to deliver a 25-basis-point rate cut at its conclusion on Wednesday.
The move would mark the second reduction this year, bringing the federal funds rate down to the 3.75%-4.00% range. Bets on a cut solidified after a softer-than-expected September consumer price report, coupled with doubts over the strength of the country’s labor market. .
Additionally, Fed Chair Jerome Powell said on October 14 that the central bank is ready to end quantitative tightening, citing tighter liquidity conditions, including firmer repo rates.
Trump’s Asia tour
Investor sentiment has also drawn support from signs of easing trade tensions between Washington and Beijing. U.S. and Chinese officials concluded constructive talks in Kuala Lumpur, paving the way for a framework deal aimed at averting new tariffs.
The agreement is expected to be finalized when President Donald Trump meets Chinese President Xi Jinping later this week, and could include measures to roll back some existing duties and ease restrictions on rare-earth exports.
Trump met, earlier Tuesday, with Japan’s newly-elected Prime Minister Sanae Takaichi, a protegee of former premier and Trump’s late friend, Shinzo Abe.
Trump and Takaichi inked a framework agreement for securing rare earth supplies, in a bid to bring down international reliance on China for minerals vital in industries ranging from electric vehicles to semiconductors. However, no explicit mention of China, the dominant player in the worldwide rare earth sector, was made by either leader.
Amazon cuts workforce by 14,000
The corporate sector was also be in focus this week, with investors bracing for results from the likes of Apple, Microsoft, Alphabet, Amazon, and Meta Platforms.
Ahead of these reports, Amazon said it will reduce its corporate workforce by about 14,000 roles, as the tech giant cuts down on operational layers to limit costs amid ballooning investments in artificial intelligence.
The company had about 1.56 million full-time and part-time employees at the end of last year. Amazon’s corporate workforce includes roughly 350,000 employees.
Unitedhealth Group lifted its annual adjusted income per share forecast, citing quarterly earnings which topped Wall Street expectations, as CEO Stephen Hemsley aims to reposition the health insurance giant for "durable and accelerating growth" next year.
Delivery giant United Parcel Service reported third-quarter earnings that significantly exceeded analyst expectations, despite ongoing volume challenges in its domestic segment.
PayPal Holdings announced it had signed an agreement with OpenAI to embed its payments wallet into ChatGPT, sending shares in the digital transactions service higher premarket.
Gold declines
Gold prices retreated further on Tuesday after slumping in the previous session, as signs of easing U.S.-China trade tensions reduced bullion’s safe-haven appeal ahead of a closely-watched Federal Reserve meeting.
Spot gold was last down 1.4% at $3,927.06 an ounce, while U.S. gold futures declined 2.0% to $3,940.69/oz.
The yellow metal slipped over 3% to an over-two-week low on Monday. Prices have fallen about 10% from the record high of $4,381.29/oz reached just a week earlier.
"Even after (Monday’s) correction, gold is still up more than 50% this year, underpinned by strong ETF demand and central bank buying amid diversification," ING analysts said in a recent note.
"The recent price pullback could even be seen by some central banks as a chance to increase their holdings," they added.
Investors are now focused on the Fed policy meeting, which begins later today and is expected to end on Wednesday with a 25 basis-point rate cut.
While lower rates would typically boost gold by reducing real yields, much of the cut appears priced in, leaving limited upside for the metal in the near term.
Crude falls on production fears
Oil prices retreated Tuesday, weighed by a report of more planned output increases by a group of major producers.
Brent futures dropped 1.3% to $64.03 a barrel, and U.S. West Texas Intermediate crude futures fell 1.5% to $60.40 a barrel.
Bloomberg reported late Monday that the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, is considering increasing oil production in December this coming Sunday.
Bloomberg reported the group is looking at a third monthly production hike of 137,000 barrels a day, with the cartel seeking to reclaim a greater share of the oil market in order to offset the impact of prolonged weakness in oil prices.