The TSX started June trading with a sharp loss Friday and commodity prices hit multi-month lows amid data showing a big drop in May for U.S. job growth and a further slowing of China’s economy.
The U.S. Labour Department’s latest job report showed that the American economy only managed to add 69,000 jobs last month, far below analyst predictions of 158,000 jobs. The unemployment rate rose slightly to 8.2 per cent. US indexes had their worst day of 2012.
China’s state-affiliated Federation of Logistics and Purchasing reported that its purchasing managers index (PMI), fell 2.9 percentage points to 50.4 per cent in May, just above the 50 level that signifies expansion. The index was at 53.3 in April. Analysts say there is a good chance that Chinese policy makers will take bold steps to prop up the expansion, through billions of dollars in fresh stimulus or rate cuts.
Spain was the focus in Europe this week, as borrowing rates soared to nearly seven per cent, a level that is considered unsustainable as worries grew about the stability of the country’s banks.
The head of the European Central Bank told European Union leaders Thursday that the 17-country euro currency union is unsustainable in its current form.
The Euro Zone PMI slipped last month to 45.1 from 45.9
There is still no agreement over how to solve Europe’s debt crisis. Stronger countries like Germany want governments to cut spending, but voters in weaker countries like Greece have shown they are in no mood for more fiscal pain. The euro has fallen nearly 7 percent in May.
Market Recap (as of June 1, 2012)
The TSX closed at 11361, down -1.86% over the past week. YTD the TSX is down -5.00%.
The DOW closed at 12118, down -2.70% over the past week. YTD the DOW is down -0.8%.
The S&P closed at 1278, down -58 points or -3.02% over the past week. YTD the S&P is up 1.6%.
The Nasdaq closed at 2747, down -3.17% over the past week. YTD the Nasdaq is up 5.5%.
Gold closed at 1627, up 3.7% over the past week. YTD, gold is up 3.8%.
Oil closed at $83.26, down 8.3% over the past week. YTD oil is down 15.75%
The USD/CAD closed at 96.15. YTD the CAD is down 2.7%