Update: TSX Loses 108 Points as Energy Stocks Decline on Trans Mountain Court Ruling; Trade Talk Pessimism

Canada's main stock market was weaker Friday as trade talks between the U.S. and Canada ended for the day, with no sign of a deal, though progress has been reported. Talks will resume next week. The S&P/TSX Composite Index was down 108 points or 0.7% to close at 16,262. Volume was light ahead of a three-day holiday weekend. For the week, the TSX was down 94 points, for the month, the index was off 169 points. U.S. markets were narrowly mixed with the Nasdaq gaining 0.3% and the Dow Jones off just 0.1%. The S&P 500 gained 0.1%.

Energy stocks led decliners on the TSX as fallout from the court ruling pausing the Trans Mountain Pipeline project continued to resonate and oil prices fell 0.6% to just below $70 per barrel. Financials and materials were also weaker, while healthcare and tech finished stronger. Gold prices were modestly higher Friday but posted the longest stretch of monthly declines since 2013.

In stock news, Canadian Natural Resources (CNQ.TO) was off 2% after buying the Joslyn oil sands project for $225 million. Aimia (AIM.TO) lost 1% after settling a class action lawsuit. Oil producers fell, including Baytex Energy (BTE.TO), down 3%. Cannabis stocks moved back into positive territory after a choppy week. Heavily traded Aphria (APH.TO) rose 5% while Canopy Growth (WEED.TO) was up 3%. Aurora Cannabis (ACB.TO), the day's most active share, bucked the trend, losing 1%.

In economic news, Canada's IPPI dipped 0.2% in July (m/m) after a revised 0.7% gain in June (was +0.5%). The decline in July was the first of 2018. A 3.3% drop in the price of non-ferrous metal products drove the industrial product price index (IPPI) lower in July. The exchange rate had no impact on the IPPI in July, as the loonie was little changed against the U.S. dollar from June to July. The IPPI grew 6.6% y/y in July, with prices for energy and petroleum up 27.8% y/y. The RMPI gained 0.7% in July (m/m) following a revised 0.6% increase (was +0.5%). Broadly, the IPPI has seen the annual growth rates climb steadily higher since late 2016 as energy prices have rebounded. Canadian stock and bond markets are closed Monday for Labour Day.

The Canadian dollar lost more than a third of a cent to 76.64 US.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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