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Market wrap June 2, 2017: U.S. indices close at record highs, TSX flags on weaker oil
12/13/2017 2:00:21 PM
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By Fund Library News Wire  | Friday, June 02, 2017


 

By Mike Keerma

U.S. stock markets closed at record highs on Friday, rallying powerfully from a mid-week dip, as the yield on 10-year U.S. Treasury notes fell about 6 basis points to 2.154%. Stocks climbed in tandem with bonds, overcoming any trepidation about May’s weaker-than-expected U.S. jobs report. The S&P 500 Composite Index gained 1% on the week, while the Nasdaq Composite Index rose 1.5%. In Canada, weakness in the energy sector dampened performance as the S&P/TSX Composite tracked a modest 0.2% higher on the week, held in check by a -4.0% slide in the price of crude oil.

A weaker than expected jobs report for May indicated that U.S. non-farm payrolls grew by 138,000 in the month, while the unemployment rate edged down to 4.3%. Observers agree that neither datapoint is enough to change the Federal Reserve’s expected rate hike later this month, but may dampen plans for another hike later in the year.

In Canada, robust first-quarter GDP growth of 3.7% over the last quarter of 2016 (2.3% annualized) indicates a solid recovery from the oil shock, as crude prices hover on either side of US$50 per barrel, and a dissipation of the the economic slack that has so troubled the Bank of Canada for the past couple of years.

In company news, shares of online retailer Amazon.com Inc. (NASDAQ: AMZN) touched US$1,000 last week for the first time, propelled by eight consecutive profitable quarters driven by its cloud-computing division, Amazon Web Services, and to a lesser degree by its online retail business. The continuing strength of tech companies like Amazon and Apple Inc. (NASDAQ: AAPL), which recently became the largest U.S. publicly-traded company by market capitalization, have helped fuel the Nasdaq Composite Index to record highs and a 17% year-to-date advance.

In Canada, the big banks again turned in another quarter of stellar per share earnings, most recently last week with the Bank of Nova Scotia (TSX: BNS) reporting a 15% annualized increase in adjusted earnings per share. Adjusted earnings per share at Royal Bank of Canada (TSX: RY) rose 11%, Bank of Montreal (TSX: BMO) reported a 11% increase, Toronto-Dominion Bank (TSX: TD) earnings were up 11%, and Canadian Imperial Bank of Commerce (TSX: CM) per share earnings rose 10%.

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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