Canadian Stocks Dip Amid US-EU Tariff Framework Agreement

(RTTNews) - Canadian stocks moved lower on Monday, retreating from last week's record highs, as a breakthrough on US-Canada trade talks is still elusive as investors analyzed the outcomes of a US-EU tariff framework.

Today, the benchmark S&P/TSX Composite Index fell within a few minutes after opening at last week's close and inched up until pre mid-noon. However, unable to carry the momentum, it dipped and travelled in negative territory to finally close at 27,405.42, down by 88.93 (or 0.32%).

US President Donald Trump has announced a framework agreement on tariffs reached between the US and the EU. As per the pact, the EU has been hit by a 15% tariff for all its US exports and has further committed to invest heavily in the US energy sector in the forthcoming months ahead.

With the deadline for "reciprocal tariffs" suspension period ending on Thursday, this deal with the EU by the US comes close on the heels of a similar agreement last week with Japan.

Today in Sweden, US and Chinese high-level officials are negotiating on finalizing a trade deal between both countries as the earlier temporary commitment on the levies ends by August 12.

Investors sensed a ray of hope today though no official breakthrough information has surfaced so far on a bilateral trade agreement between the US and Canada.

Significantly, last Friday, Trump explicitly stated that the "White House has not had a lot of luck with Canada" and added that there would not be any negotiations but only taxes for Canada.

Right now, all Canadian goods that are not covered by the US-Mexico-Canada-Agreement are to suffer a whopping 35% levies from August first week. This is in addition to a separately high 50% tax on aluminium and steel exports to the US.

The Canadian PM Mark Carney had reassured Canadians that his government will soon find a way to break the deadlock but no deal that affects the interests of Canadian business houses or workforce would be agreed upon.

Investors are primarily watching the developments on this trade front.

Canada's benchmark borrowing rates are hovering around 2.5%.

The US Fed has kept the lending rates at an average 4.5%. Trump himself had expressed displeasure over this high rate and openly stated he wanted it to be slashed further.

Investors' focus is also pinned on the interest rate decisions by the US Federal Reserve as well as Bank of Canada which would come up in the next few days as it would throw more light on the real state of economy amid tariff gridlock.

Major sectors that gained in today's trading were Energy (1.96%), IT (0.32%), and Healthcare (0.05%).

Among the individual stocks, Baytex Energy Corp (4.58%), Cenovus Energy Inc (3.83%), Dye & Durham Ltd (3.86%), EQB Inc (3.89%), and Bitfarms Ltd (3.55%) were the prominent gainers.

Major sectors that lost in today's trading were Utilities (0.66%), Real Estate (1.21%), Communication Services (1.49%), and Materials (1.50%).

Among the individual stocks, First Capital REIT Units (2.31%), Rogers Quebecor Inc (3.22%), New Gold Inc (5.95%), and Orla Mining Ltd (4.27%) were the notable losers.