Canada's main stock index opened flat on Monday, as losses in industrials and materials stocks offset gains in the energy sector.
The Toronto Stock Exchange’s S&P/TSX Composite index was down 10 points, or 0.06 per cent, at 16,425.46.
U.S. stocks opened flat on Monday as losses in technology names offset gains in energy stocks following a rise in crude oil prices.
The Dow Jones Industrial Average fell 21.22 points, or 0.08 per cent, at the open to 25,036.90.
The S&P 500 opened lower by 2.66 points, or 0.09 per cent, at 2,799.17. The Nasdaq Composite dropped 13.26 points, or 0.17 per cent, to 7,806.93 at the opening bell.
With some companies already reporting a hit from the trade war, investors will assess the earnings of the 180 S&P 500 companies, including Ford Motor, 3M Co and Boeing , scheduled for later this week.
A host of high-flying technology names will also be releasing results. Google-parent Alphabet is set to post results after markets close on Monday, while Facebook , Twitter and Intel report later in the week.
Investors are also worried that the U.S.-Sino trade war could spill over to the currency markets. President Donald Trump has criticized the dollar’s strength, while accusing China of manipulating the yuan, which Beijing has denied.
The dollar hit a one-year high last week, which can eat into U.S. companies’ overseas revenue.
“We have a whole plate of issues for investors to deal with, including currency manipulation, which is going to tie into the trade war,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
“Investors are waiting for more earnings news to create a convincing direction for the market.”
Second-quarter earnings season has been healthy so far, with analysts’ profit growth forecast now at 22 percent, up from 20.7 percent on July 1, according to Thomson Reuters I/B/E/S.
About 84 per cent of the 87 S&P 500 companies that have reported so far have topped profit expectations, compared with the average of 75 percent over the past four quarters.
Investors will also keep an eye on the bond market, where yield on the U.S. 10-year Treasury note hit a one-month high of 2.90 per cent after Reuters reported that the Bank of Japan was discussing modifying its huge easing program.
“Markets will handle that and digest it in the normal course of business,” said Bakhos.
Among stocks, shares of Illinois Tool Works dropped 6.1 per cent in early trading after the industrial company cut its full-year profit forecast and margins forecast, blaming the strong dollar.
Tesla’s shares fell 6.2 per cent after a report that the electric car maker has turned to some suppliers for a refund of previously made payments in a bid to turn a profit.
Hasbro rose 10.1 per cent after the toymaker’s quarterly revenue and profit topped analysts’ estimates.
Oil prices rose on Monday on worries over supply after tensions worsened between Iran and the United States, while some offshore workers began a 24-hour strike on three oil and gas platforms in the British North Sea.
Iranian Supreme Leader Ayatollah Ali Khamenei on Saturday backed a suggestion by President Hassan Rouhani that Iran could block Gulf oil shipments if its exports were stopped.
The Iranian leadership was responding to the threat of U.S. sanctions after President Donald Trump in May pulled out of a multinational agreement to trade with Tehran in return for its commitment not to develop nuclear weapons.
Trump has said Iran risks dire consequences “the like of which few throughout history have suffered before” if the Islamic Republic made more threats against the United States.
His words, spelled out in capital letters in a Twitter message, came hours after Rouhani told Trump that hostile policies toward Tehran could lead to “the mother of all wars.”
Benchmark Brent crude oil rose $1.43 a barrel, or almost 2 percent, to a high of $74.50 before easing to around $73.70. U.S. light crude was up 75 cents at $69.01 a barrel.
“Potential Gulf supply is at risk - this is triggering the upward trend,” said Tamas Varga, analyst at London brokerage PVM Oil Associates.
The rise also followed news of a 24-hour strike by 40 rig workers on three oil and gas platforms in the North Sea. The dispute curbed gas flows to shore, but stored crude was expected to mitigate any oil supply disruption.
Moderating supply worries were concerns about the impact on global economic growth and energy demand of the escalating trade dispute between the United States and its trading partners.
Finance ministers and central bank governors from the world’s 20 biggest economies ended a meeting in Buenos Aires over the weekend calling for more dialog to prevent trade and geopolitical tensions from hurting growth.
“Downside risks over the short and medium term have increased,” the finance leaders said in a statement.
The talks occurred amid escalating rhetoric in a trade dispute between the United States and China, the world’s largest economies, which have already slapped tariffs on $34 billion worth of each other’s goods.
Trump threatened on Friday to impose tariffs on all $500 billion of Chinese exports to the United States unless Beijing agreed major changes to its technology transfer, industrial subsidy and joint venture policies.
Reuters