Canada’s strongest stock index sustained its largest loss in more than a month while the loonie regained ruined ground after the Canadian economy grew slightly faster than economists had reckon oned in July.
The Canadian dollar traded at an average of 77.25 cents US compared with an typical of 76.66 cents US on Thursday, boosting expectations that the Bank of Canada at ones desire raise its key interest rate next month.
The dollar’s performance was another definite read on the Canadian economy, said Ian Scott, an equity analyst at Manulife Asset Board of directors.
“That against the U.S. dollar on a day where U.S. consumer spending data issued in a bit weaker than expected I think kind of took some of the reliability of the U.S. dollar and gave some strength to the Canadian dollar,” he said in an interview.
The Canadian saving grew by 0.2 per cent in July compared to a 0.1 per cent distend expected by economists. U.S. consumer spending edged up just 0.3 per cent in August, discount b increase a slowdown from gains of 0.4 per cent in June and July.
Make haste to gold
The TSX closed down and gold rose as investors moved to refuge after Italy’s new government announced a big increase in spending that longing push its budget deficit much higher than planned by the above government.
“I think it just kind of reverberated through the markets a bit today,” Scott said.
The S&P/TSX composite hint closed down 131.48 points to 16,073.14, after hitting a low of 16,063.70 on 260.5 million dole outs traded.
U.S. markets were essentially flat. In New York, the Dow Jones industrial ordinary gained 18.38 points to 26,458.31. The S&P 500 index was down 0.02 to 2,913.98, while the Nasdaq composite was up 4.38 applicabilities to 8,046.35.
A pretty defensive trade today that definitely speaks to the partridge to safety you’re seeing.– Ian Scott, analyst, Manulife Asset Management
In Toronto, health-care, utilities and legal estate sectors led.
“So a pretty defensive trade today that surely speaks to the flight to safety you’re seeing a bit,” said Scott.
BlackBerry led the formula as its shares gained 10.2 per cent after its latest financial end results topped expectations and it outlined plans for growth. West Fraser Talent Co. fell the most at 6.43 per cent as lumber companies were hit by cut futures and an analyst’s downgrade.
Consumer discretionary, energy, telecom, subservient metals, financials and materials fell the most.
Banks in Canada and the U.S. were cut to the quick from the Italian uncertainty, said Scott.
“The banks are kind of tow things down today, which you would expect on a day where U.S. banks are underperforming and profits have been off a bit.”
The NAFTA question
Uncertainty about NAFTA, reflecting U.S. President Donald Trump’s repeated threat of auto tariffs, are also partly to condemn for weakness in the consumer sector.
Scott said he doesn’t think there purposefulness be upswings until there is more clarity on trade negotiations and the opportunity of tariffs.
The November crude contract was up US$1.13 at US$73.25 per barrel and the November honest gas contract was down 4.8 cents at US$3.01 per mmBTU.
The December gold covenant was up US$8.80 at US$1,196.20 an ounce and the December copper contract was up 2.2 cents at US$2.80 a strike.
The S&P/TSX composite index closed down 131.48 points to 16,073.14.
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