Following on a strong June employment report that saw gain of 259,000 jobs in the U.S., the Commerce Dept. reported an additional 217,000 new jobs created
in July. The unemployment rate remained at 4.9%. The two robust consecutive monthly job gains following weakness in April and May bolstered market
sentiment, with increased optimism that consumer spending will support the bulk of economic growth for the rest of the year.
The Canadian job creation picture wasn’t quite as rosy, however. Statistics Canada reported a net job loss of 31,200 jobs in July, following on a month of
near-zero job growth in June. A posted loss of 42,000 public sector jobs is blamed for the decline, although most analysts agree this is an anomaly and
will likely see a rebound in coming months. Canada’s unemployment rate ticked up to 6.9% from 6.8% in June.
Canada’ balance of trade figures also added to the general sense of macro gloom, as the trade deficit expanded to $3.6 billion in June, its worst month on
record. Declining exports continue to weigh on GDP growth in the second quarter, dropping at an annual -17.7% rate, while imports shrank an annual -5.6% in
the same period. The Canadian dollar dropped a cent from
Thursday’s close of US$0.77 to end Friday at US$0.76.
In the U.K., the Bank of England cut its benchmark interest rate to 0.25% from 0.5% in a larger-than-expected package of monetary stimulus that included a
revived bond-buying program, which had been on hold since 2012. The BoE said the stimulus is necessary to combat a perceived slowdown in business and
consumer confidence and an expected slowdown in growth as the U.K. negotiates its exit from the European Union, and renegotiates trade treaties with the
rest of the world. The British pound closed at US$1.307, down from US$1.323 a week ago. U.K. 10-year government bonds (gilts) closed the week at a yield of
0.67%, recovering slightly from Thursday’s record low of 0.644%.
In business news, BCE Inc. (TSX: BCE), Canada’s largest
telecommunications company, reported adjusted second-quarter profit of $820 million ($0.94 per share), up from $725 million ($0.91 per share) in the same
period a year ago. The company cited growing smartphone data use on its faster 4G LTE network for the results.
Restaurant Brands International Inc. (TSX: QSR), the parent of fast-food chains Tim Hortons and Burger King, reported higher second-quarter profits of US$90.9 million (US$0.38 per share), up from US$11
million (US$0.05 per share) in the same quarter last year. The company cited restaurant expansion and higher sales of wraps and salads for the results.
Meanwhile, Canada’s largest insurance company Manulife Financial Corp. (TSX: MFC), reported
second-quarter net income of $704 million ($0.34 per share, diluted) compared with $600 million ($0.29 per share) for the year-ago period. The company
cited a drop in interest rates and market volatility arising in part from the Brexit vote as leading contributors to the lower-than-expected earnings
Fund sponsor and wealth management company CI Financial Corp. (TSX: CIX) reported second-quarter
net income of $128.6 million ($0.47 per share), compared with $138.9 million ($0.51 per share) for the same period last year. “CI’s assets under management
have grown to record levels, reaching $113 billion in July,” said CEO Peter Anderson in a release. “We continue to make significant investments in our
business where we see strategic opportunities, including our sales team, technology, and Assante Wealth Management,” he added.
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