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Canadian Stocks Are Regaining Some Lost Ground - Canadian Commentary

The Canadian stock market is up Tuesday morning, but has begun to pare its early gains. Rising commodity prices and renewed hope for a trade deal between the U.S. and China has provided a boost to Bay Street after three consecutive days of losses.

Markets on Wall Street got off to a positive start Tuesday, but have since begun to give back some of their early gains. Renewed optimism about U.S.-China trade talks is driving the markets higher after a telephone call between top officials from the world's two largest economies. China's Commerce Ministry said Chinese Vice Premier Liu He spoke with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer.

Markets in Europe are up sharply Tuesday, as they attempt to recover from their recent losing streak.

The benchmark S&P/TSX Composite Index is up 130.69 points or 0.89 percent at 14,858.97.

On Monday, the index closed down by 66.85 points or 0.45 percent, at 14,728.28. The index scaled an intraday high of 14,795.92 and a low of 14,610.18.

The Capped Information Technology Index is gaining 1.40 percent. Constellation Software (CSU.TO) rising 0.31 percent and BlackBerry (BB.TO) is up 0.94 percent.

The Capped Industrials Index is up 1.23 percent. Air Canada (AC.TO) is climbing 1.57 percent and Finning International (FTT.TO) is gaining 4.56 percent. Canadian Pacific Railway (CP.TO) is higher by 1.96 percent and Canadian National Railway (CNR.TO) is adding 0.90 percent. Bombardier (BBD-B.TO) is rising 3.81 percent.

The heavyweight Financial Index is increasing 0.84 percent. Royal Bank of Canada (RY.TO) is advancing 0.80 percent and Canadian Imperial Bank of Commerce (CM.TO) is higher by 0.76 percent. Bank of Montreal (BMO.TO) is up 0.81 percent and Toronto-Dominion Bank (TD.TO) is gaining 0.92 percent. National Bank of Canada (NA.TO) rising 0.39 percent and Bank of Nova Scotia (BNS.TO) is adding 1.31 percent.

The Energy Index is rising 0.66 percent. Crescent Point Energy (CPG.TO) is gaining 1.11 percent and Imperial Oil (IMO.TO) is advancing 0.16 percent. Encana (ECA.TO) is up 0.18 percent and Suncor Energy (SU.TO) is climbing 0.26 percent. Canadian Natural Resources (CNQ.TO) is climbing 1.03 percent and Husky Energy (HSE.TO) is higher by 0.51 percent.

Cenovus Energy (CVE.TO) is increasing 3.49 percent after it announced that it plans to invest between $1.2 billion and $1.4 billion in 2019, with the majority of the budget going to sustain base production at its Foster Creek and Christina Lake oil sands operations. The company said it also plans to complete construction of the Christina Lake phase G expansion.

Enbridge (ENB.TO) is adding 1.69 percent after it announced that it continues to expect 2018 Discounted Cash Flow (DCF) per share to be in the upper half of its guidance range of $4.15 to $4.45 per share. The 2019 and 2020 mid-point of the projected range of DCF is unchanged from last year at $4.45 per share and $5.00 per share, respectively. Beyond 2020, Enbridge is targeting to achieve annual DCF per share growth in the range of 5%-7%.

The Capped Telecommunication Services Index is up 0.58 percent. TELUS (T.TO) is gaining 0.36 percent and BCE (BCE.TO) is advancing 0.44 percent.

The Gold Index is decreasing 0.85 percent. Barrick Gold (ABX.TO) is lower by 0.65 percent and Kinross Gold (K.TO) is declining 1.56 percent. B2Gold (BTO.TO) is falling 1.40 percent and IAMGOLD (IMG.TO) is down 0.46 percent. Goldcorp (G.TO) is weakening 1.32 percent and Eldorado Gold (ELD.TO) is surrendering 0.60 percent. Yamana Gold (YRI.TO) is dropping 2.06 percent.

MTY Food Group Inc. (MTY.TO) is rising 1.27 percent after it announced that one of its wholly-owned subsidiaries has signed an agreement to acquire the assets of gourmet burger restaurants chain, South St. Burger, which has 26 franchised and 14 corporate restaurants in operation. The network has generated over $28 million in system sales in the last 12 months.

MTY also announced that one of its wholly-owned subsidiaries has acquired substantially most of the assets of Casa Grecque for a consideration of $22.35 million.

On the economic front, German investor confidence rose strongly in December, defying expectations for a modest weakening, but caution prevailed as financial analysts' assessment of the current economic situation again deteriorated sharply due to sluggish economic growth and uncertainties linked to global trade and Brexit.

The ZEW Indicator of Economic Sentiment for Germany rose 6.6 points to reach minus 17.5 points in December, results of a survey by the Centre for European Economic Research, or ZEW, showed on Tuesday.

Economists had forecast the index, which reflects analysts' economic expectations for the next 6 months, to worsen further to minus 25.

UK wages rose at the fastest pace in a decade in the three months to October, suggesting that real pay growth is turning sustainable and contribute to economic growth if a "no-deal" Brexit is avoided.

Average wages including bonuses rose 3.3 percent year-on-year, which was the biggest increase since the May to July period of 2008, the Office for National Statistics said on Tuesday. Economists had forecast a 3 percent increase.

Producer prices in the U.S. unexpectedly showed a modest uptick in the month of November, according to a report released by the Labor Department on Tuesday. The Labor Department said its producer price index for final demand inched up by 0.1 percent in November after climbing by 0.6 percent in October. Economists had expected prices to be unchanged.

In commodities, crude oil futures for January delivery are up 1.20 or 2.35 percent at $52.20 a barrel.

Natural gas for January is down 0.155 or 3.41 percent at $4.39 per million btu.

Gold futures for February are up 1.10 or 0.09 percent at $1,250.50 an ounce.

Silver for January is up 0.177 or 1.22 percent at $14.69 an ounce.

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