Stocks Are Paring Early Gains After BoC Decision - Canadian Commentary

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(RTTNews.com) - The Canadian stock market opened modestly higher Wednesday morning, but has since pared its early gains. The Bank of Canada left its overnight rate unchanged at 1.25 percent Wednesday morning. The decision was in line with the expectations of economists.

The majority of the European markets are trading to the upside Wednesday. Italian equities are rebounding on reports that the major parties in Italy are calling for President Sergio Mattarella to dissolve parliament immediately and conduct fresh elections as early as July.

Markets on Wall Street are up slightly in early trade Wednesday, following yesterday's pullback. Bargain hunting appears to be playing a role, as investors look to snap up stocks at lower prices. However, traders were disappointed by the smaller than expected increase in private sector employment, ahead of Friday's jobs report.

The benchmark S&P/TSX Composite Index is up 25.90 points or 0.16 percent at 15,948.51.

On Tuesday, the index closed down by 93.53 points or 0.58 percent, at 15,922.61. The index scaled an intraday high of 16,013.55 and a low of 15,884.25.

The Energy Index is rising 1.25 percent. Crude oil prices are rising Wednesday ahead of U.S. oil inventories data.

Imperial Oil (IMO.TO) is higher by 1.22 percent and Canadian Natural Resources (CNQ.TO) is rising 0.99 percent. Encana (ECA.TO) is climbing 1.73 percent and Cenovus Energy (CVE.TO) is adding 0.74 percent. Suncor Energy (SU.TO) is up 1.06 percent and Crescent Point Energy (CPG.TO) is gaining 1.76 percent. Husky Energy (HSE.TO) is advancing 1.49 percent.

The Capped Information Technology Index is gaining 0.59 percent. Constellation Software (CSU.TO) is climbing 1.67 percent and Descartes Systems Group (DSG.TO) is adding 0.05 percent.

The Capped Industrials Index is up 0.37 percent. Canadian National Railway (CNR.TO) is rising 0.49 percent and Canadian Pacific Railway (CP.TO) is climbing 0.55 percent. CP Rail workers went on strike Tuesday. Almost all Teamsters members rejected the company's latest contract proposal.

WestJet Airlines (WJA.TO) is increasing 0.45 percent and Finning International (FTT.TO) is up 0.57 percent. Bombardier (BBD-B.TO) is gaining 1.94 percent.

The Gold Index is decreasing 0.29 percent. Gold prices are steady Wednesday morning amid speculation the Federal Reserve will refrain from four rate hikes in 2018 due to the political situation in Italy.

Goldcorp (G.TO) is up 0.22 and Yamana Gold (YRI.TO) is rising 0.54 percent. Eldorado Gold (ELD.TO) is higher by 0.69 percent and Kinross Gold (K.TO) is increasing 1.08 percent. IAMGOLD (IMG.TO) is climbing 0.81 percent. B2Gold (BTO.TO) is adding 0.29 percent.

The heavyweight Financial Index is decreasing 0.20 percent. Toronto-Dominion Bank (TD.TO) is losing 0.03 percent and Royal Bank of Canada (RY.TO) is surrendering 0.50 percent. Canadian Imperial Bank of Commerce is falling 0.35 percent.

National Bank of Canada (NA.TO) is weakening by 0.23 percent after it reported earnings came in at C$547 million, or C$1.44 per share. This compares with C$484 million, or C$1.28 per share, in last year's second quarter.

Bank of Montreal (BMO.TO) is declining 0.11 percent after reporting earnings of C$1.25 billion in Q2 vs. C$1.25 billion in the same period last year.

On the economic front, Eurozone economic sentiment weakened to a 9-month low in May, survey results from European Commission revealed Wednesday. The economic confidence index dropped to 112.5 in May from 112.7 in April. This was the lowest reading since August 2017 but above the expected score of 112.0.

Germany's retail sales expanded for the first time in five months in April, figures from Destatis showed Wednesday.

In real terms, retail sales grew 2.3 percent in April from March, when trade decreased by revised 0.4 percent. This was the biggest growth since October 2016. Economists had forecast a moderate increase of 0.5 percent.

Germany's consumer prices climbed at the fastest pace in more than a year in May largely on higher liquid fuel costs, flash data from Destatis showed Wednesday.

Consumer prices climbed 2.2 percent year-on-year in May, faster than the 1.6 percent increase in April and the expected growth of 1.9 percent. The last time the inflation rate reached this level was in February 2017.

Germany's unemployment rate decreased in April, figures from Destatis revealed Wednesday. The jobless rate dropped to adjusted 3.4 percent in April from 3.5 percent in March. In the same period of last year, the unemployment rate was 3.8 percent.

Germany's unemployment rate declined to a record low in May, data from the Federal Labor Agency showed Wednesday. The unemployment rate fell to 5.2 percent in May, the lowest since German reunification in 1990. The rate was expected to remain unchanged at 5.3 percent.

Germany's import prices increased at a slower-than-expected pace in April, after falling in the previous two months, data from Destatis showed Wednesday.

Import prices climbed 0.6 percent year-over-year in April, reversing a 0.1 percent drop in March. That was slower than the expected rise of 0.8 percent.

Data also showed that export prices increased 0.7 percent annually and by 0.2 percent monthly in April.

France's economy expanded at a slower than initially estimated pace in the first quarter, second estimate from the statistical office Insee showed Wednesday. Gross domestic product grew 0.2 percent sequentially in the first quarter, slower than the 0.7 percent expansion registered a quarter. The sequential growth rate was revised down from 0.3 percent.

France's consumer spending declined unexpectedly in April, after rising in the previous two months, figures from the statistical office INSEE showed Wednesday. Consumer spending dropped 1.5 percent month-over-month in April, reversing a 0.2 percent rise in March. Economists had expected the same 0.2 percent increase for the month.

UK shop prices continued to fall in May, the British Retail Consortium reportedly said Wednesday. The BRC-Nielsen shop price index declined 1.1 percent year-on-year in May, the biggest fall since January 2017.

Payroll processor ADP released a report on Wednesday showing private sector employment increased by slightly less than expected in the month of May.

ADP said private sector employment climbed by 178,000 jobs in May after rising by a downwardly revised 163,000 jobs in April.

Economists had expected employment to increase by 190,000 jobs compared to the jump of 204,000 jobs originally reported for the previous month.

In commodities, crude oil futures for June delivery are up 0.64 or 0.96 percent at $67.37 a barrel.

Natural gas for June is down 0.016 or 0.55 percent at $2.887 per million btu.

Gold futures for June are up 1.10 or 0.0.08 percent at $1,305.20 an ounce.

Silver for July is up 0.082 or 0.50 percent at $16.455 an ounce.

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This article appears in: Stocks , World Markets , Politics , Oil
Referenced Symbols: BMO ,

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