Canada’s main stock index closed flat on Friday as a rise in healthcare stocks offset a drop in financial shares after inflation data lifted expectations the central bank will hold interest rates steady later this month.
The Toronto Stock Exchange’s S&P/TSX composite index rose 18.76 points, or 0.12 per cent, to 16,162.31.
Canadian inflation cooled slightly in April, Statistics Canada said, dampening prospects of another Bank of Canada interest rate hike as early as this month and weakening the Canadian dollar.
Eight of the index’s eleven major sectors were higher, led by the healthcare sector’s 4.3-per-cent jump.
The largest advancers on the exchange were cannabis firms, with Aurora Cannabis Inc. rising 10 per cent, Canopy Growth Corp. 8.8 per cent and Aphria Inc. 3.1 per cent.
Financial stocks fell 0.2 per cent with Royal Bank of Canada dipping 0.5 per cent and Bank of Nova Scotia and Canadian Imperial Bank of Commerce both slipping 0.3 per cent
The S&P 500 ended lower on Friday after a choppy trading session as bank and chipmaker stocks weighed on the index and investors grappled with U.S.-China trade talks.
The Dow Jones Industrial Average rose 1.93 points, or 0.01 per cent, to 24,715.91, the S&P 500 lost 7.12 points, or 0.26 per cent, to 2,713.01 and the Nasdaq Composite dropped 28.13 points, or 0.38 per cent, to 7,354.34.
China denied accounts by some U.S. officials that it had offered a package to slash the U.S. trade deficit by up to $200-billion, but said the consultations were “constructive,” in the latest back-and-forth message to emerge from the high-level summit.
“I think everybody’s waiting on some sort of direction on American trade talks that are occurring right now,” said Oliver Pursche, vice chairman and chief market strategist at Bruderman Asset Management in New York.
Boeing Co. shares rose on hopes for a reduction in the United States-China trade deficit, after a U.S. source said the aircraft maker would be major beneficiary if President Donald Trump were to accept the reported Chinese offer to narrow the trade gap. Boeing is the largest U.S. exporter and sells about a quarter of its commercial aircraft to Chinese customers. . Boeing shares advanced 2.1 per cent and helped pull the Dow Jones Industrial Average into positive territory.
Small-cap stocks continued to outperform, and the Russell 2000 hit a record high for a third consecutive session.
Small-cap stocks “are somewhat insulated from how the trade talks might happen barring any kind of ... additional threat from tariffs,” Pursche said. “It makes sense that they’re not under the same type of pressure.”
Yields of U.S. 10-year Treasuries pulled back from near seven-year highs as buyers emerged after a bond sell-off earlier in the week prompted by growing inflation worries. For the week, the 10-year yield was on track to increase 12 basis points, its biggest weekly gain in a month.
Shares of JPMorgan Chase, Citigroup, Bank of America and Wells Fargo were all lower, pulling the S&P Financial index down 0.9 per cent.
While banks typically benefit from higher interest rates, some investors have expressed skepticism that the banking sector has much further room to rise unless loan growth accelerates or regulations slacken considerably.
Alphabet Inc. stock slid 1.1 per cent ahead of an expected story about the tech bellwether on CBS News’ “60 minutes” this weekend.
Shares of Applied Materials dropped 8.3 per cent after the chip equipment maker’s weak 2019 forecast added to concerns of softening smartphone demand.
The Philadelphia Semiconductor index was down 1.4 per cent.
Oil prices fell on Friday, but Brent crude marked its sixth straight week of gains, boosted by plummeting Venezuelan production, strong global demand and looming U.S. sanctions on Iran.
Brent crude futures fell 79 cents, or 1 per cent, to settle at $78.51 a barrel. The global benchmark on Thursday broke through $80 a barrel for the first time since November 2014, and investors anticipate more gains due to supply concerns, at least in the short term.
Brent, which has gained about 17.5 per cent since the start of the year, rose about 1.9 per cent this week.
West Texas Intermediate (WTI) crude futures fell 21 cents to settle at $71.28 a barrel, a 0.29 percent loss. The contract rose about 0.9 per cent for the week, its third straight week of gains.
“Nothing has changed fundamentally today to really drive that small price movement down,” said Nick Holmes, an investment analyst on the energy portfolio team at Tortoise Capital in Leawood, Kansas, adding that some investors were taking profits ahead of the weekend.
Traders were looking ahead to Venezuela’s election on Sunday, which could then trigger additional U.S. sanctions if President Nicolas Maduro is re-elected for a six-year term, though the opposition party has largely boycotted and two of his most popular opponents have been banned from running.
Reuters