Canada's main stock market posted a sharp decline Wednesday afternoon on unconfirmed reports that U.S. President Trump might pull his country out of NAFTA. The White House said that Trump's position on NAFTA has not changed, but the damage on the markets was done. The S&P/TSX Composite Index shed 71 points or 0.4% to close at 16,247. NAFTA talks are set to resume in Montreal in about two weeks. U.S. markets finished in negative territory today, the first losing session on Wall Street in 2018.
In sector news, energy was little changed even as crude oil gained 1%. Tech lost 0.6% while financials were flat. On the plus side, materials gained 0.7% as gold prices rose, along with silver and copper.
Instock news cannabis shares were heavily traded today, but ended in modestly negative territory. Aurora Cannabis (ACB.TO) shed 2% while Canopy Growth (WEED.TO) was little changed and Aphria (APH.TO) lost 0.6%. Pure Industrial REIT (AAR-UN.TO) was last seen trading at $8.09 after its shares were halted following Blackstone's announcement it would buy the Vancouver REIT for $3.8 billion. Chorus Aviation (CHR.TO) shed 1.25% after its profits missed estimates.
In economic news, Canadian building permit values dropped 7.7% in November after a revised 4.4% bounce in October (was +3.5%). The pull-back in November was larger than expected, but is not exactly a shock given how volatile this indicator tends to be from month to month. Permits values for non-residential structures tumbled 12.3% after back-to-back gains in September and October. Statistics Canada notes the decline was spread over all three non-residential components: commercial, industrial and institutional. But single-family permit values were little changed. Notably, Toronto permits were up 18.8% m/m in November, with multi-family values jumping 30.1% and single-family dwellings rising 8.6%. Vancouver saw a 21.0% drop in residential permits for November, while Montreal posted a 26.6% decline in residential permits. This report provides another window on the regional and sectoral (residential versus non-residential) gyrations in housing. Broadly, the housing market was strong in 2017, with housing starts averaging a 220.5k pace that is the best since 2007's 228.4k.
The Canadian dollar was down on the Trump-leaving-NAFTA report, falling nearly half-a-cent to 79.73 US, recovering from earlier steeper losses.
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