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Weekly wrap Aug. 4, 2017: Stock markets recover on strong U.S. jobs report
7/18/2018 4:36:32 AM
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By Fund Library News Wire  | Friday, August 04, 2017


By Mike Keerma

A strong U.S. jobs report on Friday helped rally U.S. stock indices towards the end of a week that was dominated by choppy trading. However, while the Dow Jones Industrial Average closed at a record high 22,092.81 on Friday, the broader blue-chip benchmark S&P 500 Composite Index eked out an advance of just 0.2% on the week, while the Nasdaq Composite Index closed with a hairline retreat of -0.4% from last Friday’s close. Toronto’s benchmark S&P/TSX Composite Index gained 0.9% on the week, driven mainly by climbing energy shares and the halo effect of sizable U.S. creation. Gold slipped -0.3% and WTI crude oil edged down -0.6% on the week, having negligible effect on S&P/TSX performance last week.

U.S. non-farm jobs grew by 209,000 in July, continuing a strong job-creation trend seen through most of this year. The unemployment rate stood at 4.3%, while average hourly earnings growth remained at a 2.5% annualized pace. Market observers believe the latest data on job creation, inflation, and unemployment continue to support the Federal Reserve Board’s plans to begin normalizing its balance sheet in September, with the possibility of another rate hike in December.

The pace of Canadian job gains softened in July, with 19,400 jobs, down from the 45,000 in June and 54,000 in May. However, the unemployment rate notched down to 6.3% from 6.5% in June, suggesting some tightening in the labour market.

In business news, iPhone maker Apple Inc. (NASDAQ: AAPL) posted fiscal third-quarter earnings of US$8.72 billion (US$1.67 per share), compared with US$7.8 billion (US$1.42 per share) for the same period a year ago. The company’s share price rose to record high of US$159.75 earlier in the week on optimism about sales of Apple’s forthcoming release of its upgraded iPhone 8, which most observers expect in September. The company’s market capitalization rose to over US$803 billion, putting it on pace to become the first company with a market cap of US$1 trillion within the next year if its share price continues to climb towards US$195.

In Canada, telco BCE Inc. (TSX: BCE) reported net earnings for its fiscal second quarter of $811 million ($0.84 per share) compared with $830 million ($0.89) in the same period a year ago period. Bell said it lost 13,000 cable TV subscribers, while gaining an additional 1,000 Internet subscribers and adding 89,000 post-paid wireless subscribers in the quarter. It also launched its Alt TV streaming service for cable cord-cutters, but CEO George Cope said in a conference call that this has not had any impact on financial results so far.

Check Fund Library’s Market Activity page regularly for active updates on key market indexes and commodities.

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The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.

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