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Canadian Stocks Are Up On Trade Deal Optimism - Canadian Commentary

The Canadian stock market is trading solidly to the upside Tuesday morning. Global equity markets are rallying on optimism for a trade deal between the U.S. and China.

Markets in Europe have been climbing throughout Tuesday's session and hit their highest level in 3 weeks.

Markets on Wall Street got off to a positive start Tuesday, but have since pared their early gains. Optimism about trade talks between the U.S. and China is driving stocks higher amid a second day of meetings between U.S. and Chinese officials. In a post on Twitter this morning, President Donald Trump claimed, "Talks with China are going very well!"

The benchmark S&P/TSX Composite Index is up 98.97 points or 0.68 percent at 14,603.10.

On Monday, the index closed up by 77.51 points or 0.54 percent, at 14,504.13. The index scaled an intraday high of 14,515.12 and a low of 14,383.06.

The Energy Index is rising 1.08 percent. Canadian Natural Resources (CNQ.TO) is climbing 1.97 percent and Husky Energy (HSE.TO) is advancing 0.62 percent. Imperial Oil (IMO.TO) is up 0.23 percent and Suncor Energy (SU.TO) is gaining 2.15 percent. Encana (ECA.TO) is increasing 3.24 percent and Cenouvs Energy (CVE.TO) is higher by 2.03 percent. Crescent Point Energy (CPG.TO) is adding 1.13 percent.

The Capped Information Technology Index is gaining 0.88 percent. Descartes Systems Group (DSG.TO) is climbing 1.26 percent and BlackBerry (BB.TO) is advancing 0.76 percent. Constellation Software (CSU.TO) is adding 1.62 percent.

The Capped Industrials Index is up 1.05 percent. Canadian Pacific Railway (CP.TO) is higher by 2.06 percent and Canadian National Railway (CNR.TO) is advancing 1.90 percent. Finning International (FTT.TO) is adding 0.50 percent.

The Capped Telecommunication Services Index is up 0.67 percent. TELUS (T.TO) is gaining 0.31 percent and Rogers Communications (RCI-B.TO) is rising 1.32 percent. BCE (BCE.TO) is higher by 0.88 percent.

The Capped Materials Index is up 0.62 percent. Franco-Nevada (FNV.TO) is gaining 0.61 percent and Nutrien (NTR.TO) is advancing 2.63 percent.

The heavyweight Financial Index is increasing 0.50 percent. Bank of Montreal (BMO.TO) is climbing 0.36 percent and Royal Bank of Canada (RY.TO) is up 0.31 percent. Bank of Nova Scotia (BNS.TO) is higher by 0.68 percent and Toronto-Dominion Bank (TD.TO) is adding 0.21 percent.

The Gold Index is decreasing 0.87 percent. Kinross Gold (K.TO) is surrendering 0.48 percent and Barrick Gold (ABX.TO) is forfeiting 4.25 percent. Eldorado Gold (ELD.TO) is falling 1.13 percent.

Lucara Diamond Corp. (LUC.TO) is falling 3.77 percent after it announced that it expects its 2019 revenue to be between $170 million and $200 million. The company is also predicting an annual dividend of Canadian $0.10 per share, to be paid quarterly.

On the economic front, a report from Statistics Canada this morning showed that the Canadian trade deficit widened to C$2.1 billion in November, from C$851 million in October. Economists had expected a deficit of C$1.95 billion.

Eurozone's economic sentiment decreased more-than-expected in December to its lowest level since the start of 2017, survey data from the European Commission showed on Tuesday. The economic sentiment index dropped to 107.3 from 109.5 in November. Economists had predicted a score of 108.2.

Germany's industrial production unexpectedly decreased for a third straight month in November, amid a sharp fall in consumer goods and energy output, worsening fears of a technical recession in the biggest euro area economy.

Overall industrial production fell a calendar and seasonally adjusted 1.9 percent from October, when it decreased 0.8 percent, revised from 0.5 percent, preliminary data from the Federal Statistical Office showed on Tuesday.

Economists had expected a 0.3 percent increase. The latest decline was the biggest since a 2.3 percent slump in July.

France's merchandise trade deficit widened sharply in November and was worse than economists' forecast, preliminary figures from the French Customs showed on Tuesday. The visible trade deficit rose to EUR 5.1 billion from EUR 4.1 billion in October. Economists had expected a shortfall of EUR 4.9 billion for November. A year ago, the deficit was EUR 5.96 billion.

UK house price inflation accelerated in December after slowing in the previous month, though house price growth for 2018 remain thin, survey data from the Lloyds Bank unit Halifax showed on Tuesday. House price rose 1.3 percent year-on-year in the three months to December, which was faster than the 0.3 percent growth in the three months to November. Economists had expected a 0.4 percent increase.

In commodities, crude oil futures for January delivery are up 0.65 or 1.34 percent at $49.17 a barrel.

Natural gas for January is up 0.078 or 2.65 percent at $3.022 per million btu.

Gold futures for February are down 5.50 or 0.43 percent at $1,284.40 an ounce.

Silver for January is down 0.081 or 0.51 percent at $15.675 an ounce.

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