Market week: Nasdaq touches record high
TSX lags on crude oil weakness, aluminum tariffs
U.S. stock indexes posted solid gains on the week, as the economy added 1.76 million jobs in July, while the U.S. unemployment rate fell to 10.2% in the month from 11.1% in June. In addition, investor hopes for an extended coronavirus aid package from Congress were disappointed as Democrats and Republicans failed to reach an agreement before the House recessed for a summer break. In addition, sentiment was dampened in Friday’s trade after U.S. President Donald Trump signed an executive order on Thursday banning transactions with the Chinese-government-controlled Bytedance and Tencent Holdings, parent companies of social media subsidiaries TikTok and WeChat, respectively.
Still, the broad blue-chip S&P 500 Composite Index advanced 2.5% on the week. The technology-weighted Nasdaq Composite Index also rolled to a 2.5% gain on the week, after logging a series of record highs and closing the week above the psychologically important 11,000 mark.
In Canada, meanwhile, July saw a gain of 418,500 jobs in July, following a gain of 950,000 in June. Canada’s unemployment rate dropped to 10.9% in July from 12.3% in June as more provinces moved to a wider Stage 3 opening of the economy.
However, the benchmark S&P/TSX Composite Index lost ground marginally on the week as the price of crude oil lost ground in Friday’s trade owing to concerns of declining demand from renewed coronavirus lockdowns. (Crude still advanced 2.9% on the week overall.) Investors anxiety was raised further when President Trump announced 10% tariffs on some Canadian aluminum products.
Gold continued its climb as more investors sought its inflation-hedge properties in the face of massive central bank stimulus and government spending in an effort to support economies ravaged by coronavirus lockdowns.
Fund news and updates
* Horizons launches emerging markets ETF. Horizons ETFs Management (Canada) announced on Aug. 5 the launch of its Horizons Emerging Markets Equity Index ETF (TSX: HXEM). The fund tracks the Horizons Emerging Markets Futures Roll Index (Total Return) which measures the performance of large- and mid-cap securities across 26 emerging markets countries. The Index reflects the returns generated over time through long notional investments in a series of MSCI Emerging Markets Index Futures that are, in turn, based on the performance of the MSCI Emerging Markets Index.
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