“Don’t Try This At Home” – David Letterman
Stocks Step Back After Recent Rally
Stocks in Canada’s largest centre retreated on Friday, weighed down by cooling energy and financial stocks, with investors taking some profits after making gains in four of the previous five sessions. The S&P/TSX composite index fell 20.63 points to greet Friday’s noon at 15,182.98. The Canadian dollar slumped 0.56 cents to 81.40 cents U.S.
On the economic beat, Statistics Canada said retail trade rose for the second consecutive month in March, advancing 0.7% to $42.5 billion. The Consumer Price Index rose 0.8% in the 12 months to April, after increasing 1.2% in March. On a seasonally adjusted monthly basis, retail inflation decreased 0.1% in April, following a 0.3% rise in March.In the U.S. the Dow Jones Industrials swooned 48.68 points midday Friday to 18,237.06. The S&P 500 index slid 3.47 points to 2,127.35. The NASDAQ slumped 3.73 points to 5,087.06 The U.S. Labor Department said on Friday its Consumer Price Index (CPI) rose 0.1% last month, with the core figure discounting food and energy costs up 0.3%, for the largest gain since January 2013.
Yellen Says Rate Hike Likely Before Year’s End
Federal Reserve Chair Janet Yellen said she expects the Fed to begin raising interest rates later this year if the job market improves and it is confident that inflation will rise closer toward its target rate. She cautions that the economy is still facing a number of headwinds that could stall growth. In a speech in Rhode Island, Yellen highlighted problems such as disappointing wage growth and a significant number of people working part time who would like full time jobs. She also mentioned a weak housing recovery and global economic weakness.
Yellen says because the Fed’s interest rate moves take time to filter through the economy, she believes further improvements in the economy will likely make it prudent to start raising rates later this year. With a rise in U.S. rates Canada is likely not far behind.
Sources: Bloomberg; Investment Executive; advisor.ca; Statistics Canada