CTAs keep buying Treasuries, gold longs face stop-loss risk: BofA
Investing.com - Canada’s main stock exchange was flat on Monday as traders looked ahead to key inflation data and Federal Reserve interest rate commentary later in the week.
Analysts were also assessing the potential of a peace deal to end the war in Ukraine, with U.S. President Donald Trump set to speak face-to-face with Ukrainian counterpart Volodymyr Zelensky in Washington.
By 12.05 ET, the S&P/TSX 60 index standard futures contract was flat too, down less than 1 point.
The S&P/TSX Composite index was holding the flatline, gaining just 1 point to be at 27,909.36.
Index edged down marginally on Friday, prior to a high-stakes summit between Trump and Russian President Vladimir Putin in Alaska. For the week, the index gained 0.5%.
U.S. stock almost flat
U.S. stock index was almost flat, pausing for breath after a positive week as investors awaited a meeting between Ukraine President Volodymyr Zelensky and U.S. President Donald Trump in Washington as well as the upcoming Jackson Hole Symposium.
The Dow Jones Industrial Average fell 20 points, or 0.1%, the S&P 500 index slipped 3 points, or 0.1%, while the NASDAQ Composite gained 10 points, or 0.1%.
The main Wall Street indices notched their second straight positive week, with the blue-chip Dow Jones Industrial Average joined the benchmark S&P 500 and tech-heavy Nasdaq Composite in reaching a new all-time peak at some point last week.
Zelensky heads for Washington
Zelensky is due to meet with Trump in Washington on Monday in a bid to arrange the outlines of a potential peace deal.
He is likely to come under pressure to agree to a deal, with reports suggesting that a possible agreement could involve Ukraine relinquishing swathes of its eastern region, including Donetsk and Luhansk to Russia, while the Kremlin will withdraw from southern regions of Kherson and Zaporizhzhia.
Zelensky, who will be flanked by leaders from a host of European countries, has said he supports a "swift and reliable" termination to the more than three-year-old conflict, but said Russia must be willing to end the war "it started."
Trump said on Sunday that Zelensky could end the war with Russia ‘almost immediately’ by acquiescing to Moscow’s demands.
Jackson Hole awaited for more rate cues
The main economic focus this week is squarely on Federal Reserve Jerome Powell’s speech at the Jackson Hole symposium on Friday, which is expected to provide more cues on interest rates.
Powell’s address comes amid growing conviction that the Fed will cut interest rates by 25 basis points in September, especially following soft payrolls and consumer inflation readings for July. Investors are pricing in a 83% chance for a 25 bps cut in September, CME Fedwatch showed.
Strong producer inflation data released last week largely ruled out the chances of a bigger cut.
Walmart (NYSE:WMT), Target (NYSE:TGT) to round off second-quarter earnings
A host of major retailers are set to report their second-quarter earnings this week, rounding off a mostly positive reporting season.
Walmart and Target will be the most closely watched, with other major retailers including Home Depot (NYSE:HD), Lowe’s (NYSE:LOW) Companies Inc, and TJX Companies (NYSE:TJX) also on tap.
The earnings will provide more insight into the U.S. consumer, amid some concerns that President Donald Trump’s tariffs will chip away at private spending.
About 90% of S&P 500 companies have reported June quarter earnings so far, with 81% of the ones that reported logging stronger-than-expected prints, data from FactSet showed.
Other majors reporting this week include Workday (NASDAQ:WDAY), Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), Palo Alto Networks and Analog Devices (NASDAQ:ADI).
Crude edges higher
Oil prices rose Monday, bouncing after last week’s losses, as concerns over Russian supply receded following last week’s meeting between Trump and Putin.
At 12.05 ET, Brent futures gained 0.3% to $66.04 a barrel, and U.S. West Texas Intermediate crude futures rose 0.4% to $62.22 a barrel.
Both contracts fell nearly 1.5% on Friday, and ended with sharp weekly losses before the U.S.-Russia meeting concluded.
Trump decided against exerting any further pressure on Russia to end the Ukraine war through measures to disrupt its oil exports following his meeting with Putin on Friday.
Gold slips
Gold prices slipped in European trade on Monday, following the two-week low as safe havens remained in vogue amid dialogue over the Russia-Ukraine war.
Uncertainty before the Jackson Hole central bank symposium this week also favored gold and weighed on the dollar, as markets maintained bets that the Fed will cut rates next month.
Spot gold was slightly lower than flatline at $3,332.50 an ounce, while gold futures for October was down 0.16% to $3,377.30/oz by 12.05 ET. The yellow metal had fallen to an over two-week low last week.