Canada’s main stock index fell at open on Friday, as energy shares dropped on decline in oil prices, while latest data showed the economy grew in line with expectations in the third quarter.
The Toronto Stock Exchange’s S&P/TSX composite index was down 53.23 points, or 0.35 per cent, at 15,140.81.
Energy stocks were the biggest losers, down 1.9 per cent, materials stocks fell 0.7 per cent and consumer staples stocks fell 0.5 per cent.
Canada’s economy grew at an annualized rate of 2.0 per cent in the third quarter, matching analysts’ forecasts, data from Statistics Canada showed. Growth slowed from 2.9 per cent in the second quarter on lower motor vehicle purchases and falling housing investment.
U.S. stocks opened lower on Friday as caution mounted ahead of a high-stakes U.S.-China trade meeting at the G20 Summit, whose outcome would determine if the trade war that has roiled financial markets would abate or worsen.
The Dow Jones Industrial Average fell 60.76 points, or 0.24 per cent, to 25,278.08. The S&P 500 was down 3.07 points or 0.11 per cent at 2,734.69. The Nasdaq Composite slipped 7.93 points, or 0.11 per cent, to 7,265.15.
The Canadian dollar weakened against its U.S. counterpart on Friday as oil prices dropped, while North American leaders signed a new trade pact and domestic data showed growth in the economy that was in line with expectations.
The Canadian dollar was trading 0.2 per cent lower at 1.3304 to the greenback, or 75.17 cents US. The currency, which on Wednesday touched a five-month low at 1.3360, traded in a range of 1.3273 to 1.3331.
In Canada, some market players were disappointed by the composition of the economic data and a contraction in gross domestic product for the month of September.
But chances of another Bank of Canada interest rate hike as soon as January were little changed at 70 per cent, the overnight index swaps market showed.
The central bank, which has raised interest rates five times since July 2017, will make an interest rate decision next week, but is not seen moving rates.
The leaders of Mexico, Canada and the United States signed the a North American trade pact, the United States, Mexico, Canada Agrement, after brinkmanship over the final details of the deal continued through the eve of the signing.
The signing of the agreement could reduce uncertainty for Canada’s economy, but that prospect has been offset since October by a sharp drop in the price of oil, one of Canada’s major exports.
Oil prices fell further on Friday as swelling inventories depressed sentiment despite widespread expectations that Organization of the Petroleum Exporting Countries and Russia would agree on some form of production cut next week. U.S. crude prices were down 1.3 per cent at US$50.77 a barrel.
U.S. Trade Representative Robert Lighthizer said he would be surprised if Saturday’s dinner between U.S. President Donald Trump and China’s Xi Jinping “wasn’t a success.”
Markets have faced conflicting headlines in the run up to the two-day meeting of 20 industrialized nations in Buenos Aires, where all eyes would be on the trade talks between the world’s two largest economies that have imposed tariffs on hundreds of billions of dollars of each other’s imports.
President Donald Trump said on Thursday he was close to making a deal but was not sure if he wants to do it, while news that Trump’s hardline trade adviser Peter Navarro, will attend the meeting between Trump and Xi, added to worries.
“People don’t want to get too optimistic heading into a meeting, because the president is kind of a wild card,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
“You don’t know how tough he’ll be with this meeting and these negotiations.”
So far this week, dovish comments from Federal Reserve Chair Jerome Powell and the latest Fed minutes have helped the benchmark S&P 500 rise 4 percent, setting it on course to post its biggest percentage gain in nine months.
General Electric shares fell 6.5 per cent after the Wall Street Journal reported several former employees told the U.S. securities regulator the company failed to acknowledge worsening results in the insurance business.
Marriott International Inc. dropped 4.7 per cent after the company said a guest reservation database of its Starwood Hotel brand was breached, potentially exposing information on about 500 million guests.
HP Inc. slipped 0.3 per cent after its quarterly revenue beat analysts’ estimates on Thursday, driven by growth in its personal systems business.
Reuters