Stocks Stub Toes Despite Soft Inflation Data

Equities in Toronto stumbled a bit, on their way to a third straight session of gains on Friday after the U.S. inflation data came in line with expectations, intensifying hopes of an interest rate cut by the Federal Reserve in September.

The TSX Composite Index gathered 30.02 points to begin Friday at 21,972.18. On the week, the index has grown 377 points, or 1.75%.

The Canadian dollar was up 0.07 cents to 73.07 cents U.S.

The federal government intervened on Thursday to prevent a strike by maintenance engineers at Onex Corp- backed WestJet Airlines to avoid more flight cancellations ahead of a busy holiday weekend. Onex remained at Thursday’s closing level of $92.45.

First Quantum Minerals fell 62 cents, or 3.2%, to $18.75 after Reuters reported the miner will launch formal arbitration proceedings against Panama in July over the country’s decision to close the Cobre Panama mine last November.

On matters economic, Statistics Canada reported April GDP grew 0.3% as both goods-producing and services-producing industries increased during the month.


The TSX Venture Exchange slipped 3.01 points to 567.54, for a loss of 3.17 points, or 0.55%, on the week.

Seven of the 12 TSX subgroups were lower by noon, with health-care ailing 1%, while materials and utilities spilled 0.5% each.

The five gainers were led by real-estate and consumer discretionary stocks, each up 0.3%, and industrials, better by 0.2%.


The S&P 500 rose on Friday to a fresh intraday high as traders digested personal consumption expenditures price index data that indicated slowing inflation, as well as better-than-expected consumer sentiment figures. They are also counting down to the end of what has been a
strong first half of the year.

The Dow Jones Industrials gained 69.65 points to pause for lunch hour at 39,233.71.

The much-broader index gathered 14.56 points to 5,497.43.

The NASDAQ moved higher 52.18 points to 17,910.86.

All three indices have gained ground in June. The NASDAQ once again led with a month-to-date rally of more than 6%. The S&P 500 is up more than 4% and Dow has gained more than 1%.

For this week alone, the NASDAQ has advanced 1%. The S&P 500 has ticked up around 0.6%, while the Dow advanced 0.5%.

Nike shares slipped more than 19% after the athletic retailer cut its full-year guidance. Foot Locker shares declined 2% in sympathy.

Inflation in May slowed to its lowest annual rate in more than three years, the Commerce Department reported on Friday. Core PCE, which excludes the more volatile food and energy prices, rose just 0.1% last month and 2.6% from the prior year. Both estimates were in line with the Dow Jones consensus estimates. The core PCE index is the Federal Reserve’s preferred inflation measure. Headline PCE, which includes food and energy, was flat on the month and also up 2.6% on an annual basis, also in line with expectations.

The consumer sentiment index for June also came in higher than expected, rising to 68.2 from the preliminary 65.6 reading. The one-year inflation outlook also fell to 3% from 3.3% expected in May.

Prices for the 10-year Treasury fell slightly, raising yields to 4.34% from Thursday’s 4.29%. Treasury prices and yields move in opposite

Oil prices subtracted 26 cents at $81.48 U.S. a barrel.

Gold prices improved $3.60 to $2,340.20

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