Canada’s main stock index was trading flat on Friday as a rise in healthcare stocks offset a drop in financial shares after inflation data lifted expectations the central bank will hold interest rates steady later this month.
At 11:29 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 24.61 points, or 0.15 per cent, at 16,118.76.
Canadian inflation cooled slightly in April, Statistics Canada said, dampening prospects of another Bank of Canada interest rate hike as early as this month and weakening the Canadian dollar.
The financials sector slipped 0.3 per cent, weighed down by a 0.7-per-cent drop in Royal Bank of Canada and Bank of Nova Scotia.
Six of the index’s eleven major sectors were higher, led by the healthcare sector’s 2.7-per-cent percent jump.
The largest advancers on the exchange were cannabis firms, with Aurora Cannabis Inc. rising 5.4 per cent, Canopy Growth Corp. 5 per cent and Aphria Inc 4 per cent.
U.S. stocks indexes edged mostly lower in morning trading Friday, adding to the market’s modest losses from a day earlier. Banks, technology and energy companies fell, offsetting gains by industrial stocks. Bond prices rose, sending yields lower.
The S&P 500 index slipped 3 points, or 0.1 per cent, to 2,716. The Dow Jones industrial average gained 35 points, or 0.1 per cent, to 24,749. The Nasdaq composite fell 7 points, or 0.1 per cent, to 7,375. The Russell 2000 index of smaller-company stocks picked up 1 point, or 0.1 per cent, to 1,627. Rising and falling stocks were evenly split on the New York Stock Exchange.
After a strong start to the month, markets have been choppy this week as investors turned the page on the first-quarter earnings reporting season and weighed the implications of rising interest rates and the ongoing trade tensions between the U.S. and China. The countries, which have threatened tariffs on each other, were holding discussions aimed at averting a trade war between the world’s two biggest economies.
“Markets are taking a little bit of a breather and waiting for something to happen before reacting,” said Veronica Willis, investment strategy analyst for Wells Fargo Investment Institute. “They still don’t know what to expect, what kind of compromises may be made between the U.S. and China in terms of trade.”
Campbell Soup plunged 10.2 per cent to $35.22 after the packaged foods company lowered its profit forecast and said that its CEO, Denise Morrison, was retiring effectively immediately.
Nordstrom tumbled 9.3 per cent to $46.20 after the upscale department store chain said sales at established stores, a key metric for retailers, showed meagre gains in the first quarter.
Applied Materials gave up 8.3 per cent to $49.46 after the maker of chipmaking equipment forecast revenue for the current quarter that was below Wall Street’s estimates.
Shares in industrials stocks rose. Deere & Co. added 5.1 per cent to $154.37 after the company forecast 35 per cent growth in equipment sales for its third quarter.
U.S. bond prices rose. The yield on the 10-year Treasury fell to 3.07 per cent from 3.12 per cent late Thursday. The pullback in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks. Citigroup fell 1.3 per cent to $70.62.
Major indexes in Europe fell. Germany’s DAX gave up 0.3 per cent, while France’s CAC 40 slid 0.1 per cent. Britain’s FTSE 100 lost 0.2 per cent. Asian stock markets finished mostly higher. Japan’s Nikkei 225 added 0.4 per cent and South Korea’s Kospi index rose 0.5 per cent. Hong Kong’s Hang Seng index gained 0.3 per cent.
Brent oil prices were little changed on Friday but were on track for a sixth straight week of gains, boosted by strong demand, looming U.S. sanctions on Iran and plummeting Venezuelan production.
Brent crude futures for July delivery fell 6 cents to $79.24 a barrel, a 0.1-per-cent loss. The benchmark on Thursday broke through $80 for the first time since November 2014.
U.S. West Texas Intermediate (WTI) crude futures for June delivery fell 19 cents to $71.30 a barrel, a 0.3-per-cent loss. The contract was still set for its third straight week of gains.
“Today is a bit of a pause and a retrenchment heading into the weekend with speculators trying to decide how close are we to the seasonal shift and do I take profits here,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle.
British bank Barclays said it expected average prices of $70 per barrel for Brent this year and $65 a barrel for 2019, up from estimates of $63 and $60 previously.
“Since last month, Venezuela’s production decline, (U.S. President Donald) Trump’s Iran sanctions decision, a new disruption in Nigeria, and anecdotal evidence from a new round of producer earnings require a price forecast revision,” the bank said.
Rising prices have already raised the alarm among big oil-consuming countries.
OPEC kingpin Saudi Arabia said on Thursday it would make sure the world is adequately supplied with oil just as major consumer India expressed frustration with rising prices.
Saudi Energy Minister Khalid al-Falih called India’s Petroleum Minister Dharmendra Pradhan to assure him that supporting global economic growth was “one of the kingdom’s key goals,” the Saudi Energy Ministry said.
Reuters and The Associated Press