Canadian Stocks Are Struggling As Commodity Prices Fall - Canadian Commentary

Shutterstock photo

(RTTNews.com) - The Canadian stock market is under pressure Wednesday morning. Energy and gold stocks are weakening in early trade as commodity prices fall. Crude prices are falling on U.S. inventory data, while gold prices are slipping ahead of today's Fed announcement.

Markets on Wall Street are inching higher in early trade Wednesday. Traders appear reluctant to make any significant moves ahead of the Fed's announcement of its latest monetary policy decision this afternoon. The Fed is widely expected to leave interest rates unchanged, but the accompany statement could provide clues about the outlook for rates.

Markets in Europe are turning in a mixed performance Wednesday.

The benchmark S&P/TSX Composite Index is down 51.64 points or 0.31 percent at 16,382.37.

On Tuesday, the index closed up by 88.54 points or 0.54 percent, at 16,434.01. The index scaled an intraday high of 16,434.01 and a low of 16,324.66.

The Energy Index is falling 1.14 percent. Crude oil prices are falling Wednesday morning after the American Petroleum Institute (API) reported a crude oil inventory build of 5.59 million barrels last week, compared to analyst expectations for a 2.8 million-barrel drawdown.

The EIA reported this morning that U.S. crude inventories increased by 3.8 million barrels last week.

Suncor Energy (SU.TO) is lower by 1.17 percent and Encana (ECA.TO) is dropping 0.17 percent. Imperial Oil (IMO.TO) is falling 0.88 percent and Crescent Point Energy (CPG.TO) is declining 1.69 percent. Cenovus Energy (CVE.TO) is weakening by 1.23 percent and Canadian Natural Resources (CNQ.TO) is surrendering 1.46 percent. Husky Energy (HSE.TO) is decreasing 1.31 percent and Enbridge (ENB.TO) is losing 0.97 percent.

The Capped Materials Index is down 0.80 percent. Franco-Nevada (FNV.TO) is decreasing 0.28 percent and Agnico Eagle Mines (AEM.TO) is losing 0.86 percent.

The Capped Information Technology Index is losing 0.67 percent. Sierra Wireless (SW.TO) is weakening by 0.66 percent and Constellation Software (CSU.TO) is down 0.85 percent.

The Gold Index is decreasing 0.36 percent. Gold prices are slipping Wednesday morning, as investors await the Federal Reserve's policy announcement this afternoon.

Kinross Gold (K.TO) is declining 0.21 percent and Barrick Gold (ABX.TO) is falling 1.17 percent. Goldcorp (G.TO) is weakening by 0.37 percent and B2Gold (BTO.TO) is losing 0.31 percent. Eldorado Gold (ELD.TO) is down 1.76 percent.

The Capped Telecommunication Services Index is down 0.30 percent. BCE (BCE.TO) is losing 0.05 percent and Rogers Communications (RCI-B.TO) is declining 0.71 percent.

The heavyweight Financial Index is increasing 0.17 percent. Royal Bank of Canada (RY.TO) is rising 0.03 percent and Canadian Imperial Bank of Commerce (CM.TO) is adding 0.66 percent. National Bank of Canada (NA.TO) is up 0.27 percent and Toronto-Dominion Bank (TD.TO) is gaining 0.19 percent. Bank of Nova Scotia (BNS.TO) is advancing 0.35 percent and Bank of Montreal (BMO.TO) is higher by 0.04 percent.

Molson Coors Canada (TPX-B.TO) announced that it has entered into a definitive agreement with Canadian cannabis producer Hydropothecary Corp. or HEXO (HEXO.TO). Molson is rising 1.07 percent.

Hydro One Inc. (H.TO) announced today that it has reached a definitive agreement to acquire the business and distribution assets of Peterborough Distribution Inc. from the City of Peterborough, ON, for a consideration of $105 million. Shares are falling 0.63 percent.

On the economic front, China's manufacturing activity expanded at the slowest pace in eight months in July as export orders declined the most in more than two years, survey results from IHS Markit showed Wednesday. The Caixin Purchasing Managers' Index fell to 50.8 in July from 51.0 in June. Although the indicator remained above the neutral 50.0, the score suggested the weakest growth since November 2017.

Eurozone manufacturing activity remained subdued at the start of the third quarter, as initially estimated, final data from IHS Markit showed Wednesday. The factory Purchasing Managers' Index rose to 55.1 in July, in line with flash estimate, from 54.9 in June.

The UK manufacturing sector expanded at the slowest pace in three months in July, survey data from IHS Markit and Chartered Institute of Procurement & Supply showed Wednesday. The manufacturing Purchasing Managers' Index dropped to 54.0 in July from 54.3 in June. However, any reading above 50 indicates growth in the sector.

UK house prices increased at a faster pace in July, data from Nationwide Building Society showed Wednesday. House prices advanced 2.5 percent year-on-year in July, faster than the 2 percent rise in June. House price growth was forecast to ease to 1.8 percent.

With the release of the Labor Department's more closely watched monthly jobs report looming on Friday, payroll processor ADP released a report on Wednesday showing private sector employment in the U.S. increased by much more than expected in the month of July.

ADP said private sector employment jumped by 219,000 jobs in July after climbing by an upwardly revised 181,000 jobs in June.

Economists had expected an increase of about 185,000 jobs compared to the addition of 177,000 jobs originally reported for the previous month.

Partly reflecting slowdowns in new orders and production growth, the Institute for Supply Management released a report on Wednesday showing growth in U.S. manufacturing activity slowed by more than anticipated in the month of July.

The ISM said its purchasing managers index fell to 58.1 in July after unexpectedly climbing to 60.2 in June. While a reading above 50 still indicates growth in the manufacturing sector, economists had expected the index to show a more modest drop to 59.5.

In commodities, crude oil futures for August delivery are down 1.19 or 1.73 percent at $67.57 a barrel.

Natural gas for August is down 0.021 or 0.75 percent at $2.761 per million btu.

Gold futures for August are down 6.10 or 0.49 percent at $1,227.50 an ounce.

Silver for September is down 0.114 or 0.73 percent at $15.445 an ounce.

Read the original article on RTTNews (http://www.rttnews.com/2921566/canadian-stocks-are-struggling-as-commodity-prices-fall-canadian-commentary.aspx)

For comments and feedback: contact editorial@rttnews.com

This article appears in: Stocks , World Markets , Oil , Commodities
Referenced Symbols: ABX ,

More from RTT News


See All RTT news

Research Brokers before you trade

Want to trade FX?