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Weekly wrap July 7, 2017: Jobs growth boosts U.S. stocks, falling oil weighs on TSX
7/24/2017 12:45:39 PM
HOME : FEATURES : COLUMNS : Weekly wrap July 7, 2017: Jobs growth boosts U.S. stocks, falling oil weighs on TSX
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By Fund Library News Wire  | Friday, July 07, 2017


 

By Mike Keerma

Both the S&P 500 Composite Index and the Nasdaq Composite Index edged up this week as a positive U.S. jobs report for June buoyed investor sentiment helped along by a growing consensus that the Fed will hold off on another rate hike until December. Technology stocks rebounded after a losing streak and helped the big indices climb back from losses earlier in the week.

Toronto’s benchmark S&P/TSX Composite Index, however, slipped -1% on the week, despite similarly strong Canadian job creation in June, as traders continued to price in a 25-basis-point rate hike by the Bank of Canada next week. June’s strong job numbers helped boost the Canadian dollar to US$0.776 by Friday’s close.

Sliding energy stocks also weighed on TSX peformance as the price of crude oil fell -4.0% on the week, against a backdrop of growing supply and the global market’s general indifference to and skepticism of the much-ballyhooed production cuts by the Organization for the Petroleum Exporting Countries. And despite rising geopolitical tensions in Asia as a consequence of North Korea’s intercontinental ballistic missile test, gold fell -2.4% on the week.

The U.S. Labor Department reported that the U.S. economy added 222,000 new non-farm jobs in June, the largest monthly job gain so far this year. The unemployment rate ticked up slightly to 4.4% for the month, from 4.3% in May. Average earnings, however, rose only 0.2% on the month (a 2.5% annual rate). With low unemployment and low inflation, and a growing economy, there seems little need for the Fed to increase its federal funds rate, with analysts now expecting the Fed to push back its next rate hike to December at the earliest.

Statistics Canada reported that the Canadian economy added 45,300 new jobs in June, with part-time jobs dominating in the month, as is common in the summer months. The unemployment rate ticked back to 6.5% in June, down from 6.6% in May. Average hourly earnings, however, grew only 1.1% in the month, according to StatsCan’s Labour Force Survey, a datapoint that some economists believe should be stronger consider Canada’s GDP growth, jobs creation, and inflation rate. Still, some observers believe the most recent data are enough to spur the Bank of Canada to raise its target overnight lending rate by 25 basis points next week from .

FUND NEWS

* First Asset TrendLeaders ETF debuts on TSX. First Asset Investment Management Inc. announced that its First Asset U.S. TrendLeaders Index ETF (TSX: SID) debuted on the Toronto Stock Exchange on Friday. The CIBC U.S. TrendLeaders Index is a portfolio of U.S. stocks, chosen by a proprietary CIBC World Markets model, which selects and ranks securities based on the duration and longevity of certain underlying trend-strengths and incorporates an objective quantitative filter for technical factors.

* BlackRock announces fund terminations. BlackRock Asset Management Canada announced that it will terminate a number of its exchange-traded funds. In a release, BlackRocks said the decision to shutter the funds is “based on an ongoing process to review [BlackRock’s] product lineup and ensure it meets the evolving needs of its clients. The funds will terminate on or about Sept. 27.

* iShares Conservative Core Portfolio Builder Fund (TSX: XCR)
* iShares Growth Core Portfolio Builder Fund (TSX: XGR)
* iShares Global Completion Portfolio Builder Fund (TSX: XGC)
* iShares Alternatives Completion Portfolio Builder Fund (TSX: XAL)
* iShares MSCI Brazil Index ETF (TSX: XBZ)
* iShares BRIC Index ETF (TSX: CBQ , CBQ.A)

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

@FundLibrary – Follow Fund Library on Twitter for daily information and updates.

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© 2017 by Fund Library. All rights reserved. Reproduction in whole or in part by any means without prior written permission is prohibited.

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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