By Mike Keerma
Stock markets in Canada and the U.S. posted a losing week, to cap off a
month of lacklustre performance. Toronto’s
S&P/TSX Composite Index ground down nearly -1% on the week, led by losses in the financial and
energy sectors. The broad Canadian benchmark posted a monthly retreat of
-1.1% in June overall, its second straight monthly decline, and is now down
-2.4% for the year to date. U.S. benchmark indices didn’t do much better,
S&P 500 Composite Index declined -0.6% on the week, for a marginal gain of 0.5% on the month.
Nasdaq Composite Index lost -2.0% on the week as technology shares retreated, putting the index
-1.0% underwater for the month. Still, the Nasdaq is ahead 14% year to
date, while the S&P 500 is up 8%.
Crude oil gained 7.3% on the week, but continues to hover below US$50 per barrel,
posting a near -5% loss in June, with a -14% decline year to date.
Gold slipped -1% on the week for a -2.1% loss in June, but remained ahead 7.8%
year to date.
Helping cushion selling ahead of the long weekend was a 0.1% increase in
U.S. consumer spending rose for May. U.S. inflation, meanwhile, declined
-0.1% in May from April (with the headline consumer price index at 1.9%,
and the core at 1.7%). The inflation numbers contributed to a delcine in
U.S. bond yields as traders weighed whether the Fed would now delay another
rate hike until later in the year.
In Canada, gross domestic product grew 0.2% in April from March (a 3.3%
annual rate). Bond yields rose as The Bank of Canada’s Governor Stephen
Poloz suggested the Bank favors a rate hike above the Bank’s current 0.5%
target overnight rate, possibly as early as July, as employment picks up
and slack in economy tightens.
In company news,
Empire Co. (TSX: EMP.A), which owns grocery chains Sobey’s and Safeway, saw something of a
turnaround in its fortunes with better-than-expected earnings in its fourth
quarter. After some difficulty digesting the Safeway acquisition four years
ago, with nearly $3 billion in writedowns, Empire reported earnings of
$29.5 million ($0.11 per share) in its fourth quarter, compared with a net
loss of $942.6 million ($3.47 per share) in the same period last year. The
company last month announced a three-year turnaround plan to save $500
million per year by 2020.
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