Last updated: Jun-15-2018

Weekly wrap July 14, 2017: Stocks, oil, gold up, up and away!
6/18/2018 1:43:36 PM
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By Fund Library News Wire  | Friday, July 14, 2017


By Mike Keerma

The major U.S. and Canadian stock indices posted strong weekly gains, despite softer U.S. inflation and retail sales reports. Both gold and crude oil also rose on the week, as the U.S. dollar faded on soft inflation and retail sales data. Toronto’s benchmark S&P/TSX Composite Index advanced 1.0% on the week, fueled by a 5.1% weekly gain in the price of crude oil, a 1.3% rise in the price of gold. The Canadian dollar continued to climb against the U.S. dollar, closing the week at US$0.7905, as the Bank of Canada hiked its policy rate to 0.75%. The blue-chip U.S. benchmark S&P 500 Composite Index climbed 1.4% on the week, closing at a record high on Friday, while the Nasdaq Composite Index closed just shy of its record, gaining 2.6% on the week.

U.S. inflation remained flat on the month in June, with the annual rate for the broad consumer price index holding at 1.6%. Core prices, which exclude volatile food and energy prices, also remained unchanged in June at 1.7%. Federal Reserve Board Chairwoman Janet Yellen alluded to the current weakness in prices in remarks to Congress earlier in the weak, suggesting the the Fed may wait for signs of stronger inflation and consumer demand before pulling the trigger on another rate hike. Many analysts believe that won’t happen until December.

U.S. retail sales dropped -0.2% in June from May, suggesting that stronger household incomes have not yet stimulated consumer demand at the retail level.

The Bank of Canada, meanwhile, raised its target overnight rate by 25 basis points, to 0.75%, pointing to stronger wage growth and better-than-expected job creation as factors likely to underpin inflation ramping up to the Bank’s 2% target sometime in 2018. Current inflation alone does not account for the Bank’s move, as the core rate at 1.4% in May is still well below the BoC’s target.

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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