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Canadian Stocks Are Down As Traders Take Profits - Canadian Commentary

The Canadian stock market down slightly in early trade Tuesday. Profit taking appears to be the cause of the pullback, following the rally in global equity markets yesterday.

Traders reacted positively to the trade war truce reached by President Donald Trump and Chinese President Xi Jinping at the G20 summit over the weekend.

However, uncertainty about whether the 90-day truce will give the U.S. and China enough time to reach a long-term trade agreement appears to have inspired traders to cash in on yesterday's strong upward move.

News that U.S. Trade Representative Robert Lighthizer, one of Trump's more hawkish advisors on trade with China, has been tapped to lead the negotiations has added to the skepticism.

Markets in Europe are trading in the red Tuesday. Italy remains in focus after the country's Prime Minister Giuseppe Conte said the revised budget would be ready in the coming hours.

Markets on Wall Street are also losing ground in early trade Tuesday.

The benchmark S&P/TSX Composite Index is down 29.14 points or 0.19 percent at 15,245.84.

On Monday, the index closed up by 77.16 points or 0.51 percent, at 15,274.98. The index scaled an intraday high of 15,378.90 and a low of 15,154.73.

The Gold Index is increasing 1.63 percent. IAMGOLD (IMG.TO) is up 1.18 percent and Yamana Gold (YRI.TO) is advancing 1.75 percent. B2Gold (BTO.TO) is gaining 1.20 percent and Kinross Gold (K.TO) is rising 2.79 percent. Goldcorp (G.TO) is climbing 1.52 percent and Barrick Gold (ABX.TO) is higher by 1.40 percent.

The Capped Materials Index is up 0.55 percent. Franco-Nevada (FNV.TO) is climbing 2.04 percent and Agnico Eagle Mines (AEM.TO) is rising 3.25 percent.

The Capped Telecommunication Services Index is up 0.68 percent. TELUS (T.TO) is gaining 0.38 percent and BCE (BCE.TO) is higher by 0.65 percent. Rogers Communications (RCI-B.TO) is rising 1.14 percent.

The Capped Information Technology Index is gaining 0.25 percent. Constellation Software (CSU.TO) rising 0.31 percent.

The Capped Industrials Index is down 1.14 percent. Air Canada (AC.TO) is weakening 3.29percent and WestJet Airlines (WJA.TO) is falling 1.50 percent. Canadian Pacific Railway (CP.TO) is lower by 2.67 percent and Canadian National Railway (CNR.TO) is decreasing 1.28 percent. Finning International (FTT.TO) is losing 3.19 percent and Bombardier (BBD-B.TO) is slipping 0.88 percent.

The heavyweight Financial Index is decreasing 0.82 percent. Royal Bank of Canada (RY.TO) is declining 0.18 percent and Bank of Nova Scotia (BNS.TO) is falling 0.63 percent. National Bank of Canada (NA.TO) is weakening 0.68 percent and Toronto-Dominion Bank (TD.TO) is surrendering 0.88 percent. Canadian Imperial Bank of Commerce (CM.TO) is lower by 0.53 percent.

Bank of Montreal (BMO.TO) is down 2.82 percent after it reported net income of $1,695 million for the fourth quarter, up 38% over year-ago quarter. Adjusted net income was up 17%, at $1,529 million. The group has increased its dividend by $0.04 from the prior quarter to $1.00, up 8% from the prior year.

The Energy Index is falling 0.41 percent. Cenovus Energy (CVE.TO) is decreasing 1.36 percent and Crescent Point Energy (CPG.TO) is losing 1.38 percent. Encana (ECA.TO) is down 2.98 percent and Husky Energy (HSE.TO) is declining 0.41 percent.

Enbridge (ENB.TO) is rising 1.04 percent after it announced that affiliates of Enbridge have entered into a definitive agreement for the sale of Enbridge Gas New Brunswick Limited Partnership and Enbridge Gas New Brunswick Inc. to Liberty Utilities (Canada) LP, a wholly owned subsidiary of Algonquin Power and Utilities Corp., for a cash purchase price of CAD $331 million.

Teck Resources Ltd. (TECK-B.TO) is climbing 2.84 percent after it announced that it has sold a 30% stake in its Quebrada Blanca Phase 2 project to Sumitomo Metal Mining Co. Ltd. and Sumitomo Corp. for US$1.2 billion.

On the economic front, a report from Statistics Canada this morning showed that Canadian labor productivity increased by 0.3 percent in the third quarter.

Eurozone producer price inflation accelerated further in October, defying expectations, figures from Eurostat showed Tuesday. Producer prices rose 4.9 percent year-on-year after a revised 4.6 percent in September. Economists had expected the rate to remain unchanged at September's original figure of 4.5 percent.

British construction sector expanded at the fastest pace in four months in November, thanks to an increase in new work and consequent gains in job creation, though Brexit concerns damped expectations for the months ahead.

The CIPS construction Purchasing Managers' Index climbed to 53.4 from 53.2 in October, survey data from IHS Markit showed on Tuesday. Economists had forecast a score of 52.5.

In commodities, crude oil futures for January delivery are up 0.38 or 0.72 percent at $53.33 a barrel.

Natural gas for January is up 0.177 or 4.08 percent at $4.516 per million btu.

Gold futures for February are up 6.40 or 0.52 percent at $1,246.00 an ounce.

Silver for January is up 0.215 or 1.49 percent at $14.625 an ounce.

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