Futures Flounder Tuesday

Pot Stocks in Focus

Futures for Canada's main stock index retreated on Tuesday, tracking weakness in gold prices as rising bond yields and stronger dollar dented the yellow metal's demand.

The TSX Composite stayed positive 60.76 points to conclude Monday at 20,463.42.

The Canadian dollar slid 0.05 cents to 79.13 cents U.S.

December futures flopped 0.9% Tuesday, threatening the index’s worst session in more than a week.

Agnico Eagle Mines said on Tuesday it would merge with Kirkland Lake Gold, creating a company with a market capitalization of about $24 billion.

Aurora Cannabis on Monday missed Wall Street expectations for fourth-quarter revenue as pandemic-related restrictions weighed down consumer demand, leading Canadian provinces to cut orders.

A U.S. judge on Monday dismissed a lawsuit accusing Tilray of fraudulently overstating the value of a marketing and revenue-sharing agreement with Authentic Brands Group Inc

National Bank of Canada raised the target price on Crescent Point Energy to $12.5 from $11.00

National then raised the target price on Pipestone Energy to $4.00 from $3.25

Finally, National cut the target price on Meg Energy to $14.00 from $14.50

On the economic front, Statistics Canada reported that payroll employment increased by 324,800 (+2.0%) in July, the largest monthly increase since September 2020.

The agency adds, compared with February 2020, payroll employment was down by 427,800 (-2.5%) in July 2021.

ON BAYSTREET

The TSX Venture Exchange gathered 4.28 points Tuesday to 880.41.

ON WALLSTREET

U.S. stock futures were lower on Tuesday with NASDAQ futures taking the biggest hit as climbing bond yields pressured tech stocks.

Futures for the Dow Jones Industrials faltered 119 points, or 0.3 %, to 34,624.

Futures for the S&P 500 faded 34.5 points, or 0.8%, to 4,398.50

Futures for the NASDAQ Composite Index collapsed 228.75 points, or 1.5%, to 14,996.

Thursday marks the final day of trading of September and the third quarter. The Dow is down 1.4% for the month, and the S&P 500 is off by 1.8%. The NASDAQ Composite has lost 1.9% in September.

Tech shares were dropping in pre-market trading as a rapid rise in rates makes their future cash flows less valuable, and in turn makes the popular stocks appear overvalued. Higher rates also hinder tech companies’ ability to fund their growth and buy back stock.

Facebook, Amazon, Apple, Netflix and Alphabet shares all lost more than 1% in pre-market trading. Large chip stocks like Nvidia and AMD shed 2%. Tesla lost 1.6% in the pre-market.

The drop in tech dragged down sentiment on the markets though there were pockets of strength. Energy stocks like Exxon rose in pre-market trading as WTI crude topped $76 a barrel.

Also weighing on sentiment was a budget showdown in Washington. Senate Republicans blocked a House-passed bill Monday that would have funded the government into December and suspended the debt ceiling until December of 2022.

Congress must approve government funding by Friday to avoid a shutdown and must raise the debt ceiling soon to avoid an unprecedented U.S. default.

Overseas, in Japan, the Nikkei 225 sagged 0.2%, while in Hong Kong, the Hang Seng gained 1.2%

Oil prices took on 76 cents to $76.21 U.S. a barrel.

Gold prices flopped $15.90 to $1,736.10 U.S. a pound.