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Canadian Stocks Are Dropping As Gold Prices Fall - Canadian Commentary

The Canadian stock market is under pressure in early trade Tuesday, extending its losses from the previous session. Gold stocks are weighing on the overall market this morning.

Gold prices remain under pressure and have reached their lowest level in a month. Commodity prices were weak at the start of the trading week due to a rise in the value of the U.S. dollar after the Senate approved the tax reform bill.

The majority of the European markets are trading modestly to the downside Tuesday. Profit taking appears to be playing a role, following yesterday's rally. Traders are also keeping a close eye on the developments from the ongoing Brexit negotiations.

Markets on Wall Street are up slightly in early trade Tuesday, following yesterday's mixed performance. Traders remain hopeful that U.S. tax reform will be signed into law before the end of the year.

The benchmark S&P/TSX Composite Index is down 34.79 points or 0.22 percent at 15,934.24.

On Monday, the index closed down 69.94 points or 0.44 percent, at 15,969.03. The index scaled an intraday high of 16,092.11 and a low of 15,965.98.

The Gold Index is decreasing 0.79 percent. Gold prices are falling Tuesday morning and have reached their lowest level in 4 weeks.

IAMGOLD (IMG.TO) is falling 0.97 percent and Goldcorp (G.TO) is weakening by 1.94 percent. Kinross Gold (K.TO) is declining 1.37 percent and Eldorado Gold (ELD.TO) is surrendering 0.68 percent and Barrick Gold (ABX.TO) is losing 1.47 percent. B2Gold (BTO.TO) is dropping 0.91 percent and Yamana Gold (YRI.TO) is forfeiting 1.54 percent.

The Capped Materials Index is down 0.85 percent. Agnico Eagle Mines (AEM.TO) is decreasing 0.91 percent and Franco-Nevada (FNV.TO) is falling 0.37 percent.

The heavyweight Financial Index is decreasing 0.31 percent. Royal Bank of Canada (RY.TO) is losing 0.32 percent and Toronto-Dominion Bank (TD.TO) is falling 0.68 percent. Canadian Imperial Bank of Commerce (CM.TO) is weakening by 1.11 percent and National Bank of Canada (NA.TO) declining 0.50 percent.

Bank of Nova Scotia (BNS.TO) is surrendering 0.48 percent. The company has won regulatory approval for its recent acquisition of a Chilean bank.

Bank of Montreal (BMO.TO) is down 0.62 percent. The company reported a rough fourth quarter as earnings fell 6%. However, the bank raised its dividend.

Hurt by insurance claims related to hurricanes, the bank reported its fourth-quarter net income fell to $1.23 billion or $1.81 per share, down from $1.35 billion or $2.02 per share a year ago.

Laurentian Bank (LB.TO) also raised its dividend, but reported net income was up sharply in the fourth quarter. Shares are rising 1.69 percent.

The Capped Industrials Index is down 0.23 percent. Canadian Pacific Railway (CP.TO) is losing 0.81 percent and Air Canada (AC.TO) is decreasing 0.68 percent. Bombardier (BBD-B.TO) is declining 0.64 percent.

The Capped Information Technology Index is gaining 0.85 percent. BlackBerry (BB.TO) is rising 0.30 percent and Constellation Software (CSU.TO) is advancing 2.64 percent. Sierra Wireless (SW.TO) is up 0.26 percent.

The Energy Index is rising 0.19 percent. Crude oil prices are nearly flat Tuesday morning, ahead of U.S. rig count data.

Encana (ECA.TO) is climbing 0.60 percent and Canadian Natural Resources (CNQ.TO) is up 0.79 percent. Imperial Oil (IMO.TO) is higher by 0.33 percent and Husky Energy (HSE.TO) is adding 0.45 percent.

Trendy apparel maker Roots (ROOT.TO) sales were up 13 percent in its latest quarter compared with a year ago. Shares remain below their recent IPO price. The stock is climbing 2.52 percent.

On the economic front, Canada's merchandise trade deficit with the world totaled $1.5 billion in October, narrowing from a $3.4 billion deficit in September. Exports were up 2.7% while imports decreased 1.6%.

China's private sector growth momentum improved marginally in November, survey results from IHS Markit revealed Tuesday. The Caixin composite output index rose to 51.6 in November from October's 16-month low of 51.0. A score above 50 indicates expansion.

The services Purchasing Managers' Index climbed to 51.9 from 51.2 in October.

Eurozone retail sales declined at a faster-than-expected pace in October, after rebounding in the previous month, data from Eurostat showed Tuesday.

Retail sales dropped 1.1 percent month-over-month in October, reversing September's 0.8 percent rise, which was revised up from 0.7 percent. Economists had expected a 0.7 percent fall for the month.

Eurozone private sector growth accelerated as estimated in November, final data from IHS Markit showed Tuesday. The composite output index rose to 57.5 from 56.0 in October. The score was unchanged from the earlier flash estimate.

British service sector activity logged a further solid expansion in November, though the rate of growth eased since October, survey data from IHS Markit showed Tuesday. The IHS Markit/Chartered Institute of Procurement & Supply Purchasing Managers' Index, dropped to 53.8 in November from 55.6 in October. Economists had expected the index to drop to 55.0.

Like-for-like sales in the United Kingdom were up 0.6 percent on year in November, the British Retail Consortium said on Tuesday. That follows the 1.0 percent contraction in October.

With imports rising and exports edging lower, the Commerce Department released a report on Tuesday showing the U.S. trade deficit widened more than expected in the month of October. The report said the trade deficit widened to $48.7 billion in October from a revised $44.9 billion in September. Economists had expected the deficit to widen to $47.5 billion.

In commodities, crude oil futures for January delivery are down 0.02 or 0.03 percent at $57.45 a barrel.

Natural gas for January is down 0.069 or 2.31 percent at $2.916 per million btu.

Gold futures for February are down 9.39 or 0.74 percent at $1,268.30 an ounce.

Silver for March is down 0.243 or 1.38 percent at $16.13 an ounce.

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