“The Stronger The Ignorance, The Greater The Opinion” -Ken Follett
TSX Slightly Lower As U.S. Markets Rally
On Friday, the S&P/TSX fluctuated and finished down 0.19 per cent, or 28.57 points, to 14,725.98 in Toronto, finishing September up 0.88%. The gauge is up 4.49% since the end of June, its best quarterly performance since 2014. The Canadian economy got off to a stronger-than-expected start in the third quarter, fueled by a rebound in oil and gas extraction that had been disrupted by wildfires in Alberta earlier this year. Gross domestic product grew 0.5 per cent in July, topping analysts’ forecasts for a gain of 0.3 per cent.
In New York, the Dow Jones industrial average was unofficially up 164.63 points, or 0.91 per cent, to 18,308.08, the S&P 500 rose 17.11 points, or 0.80 per cent, at 2,168.24 and the Nasdaq Composite was up 42.85 points, or 0.81 per cent, to 5,312.00. December gold contracts were down $8.90 at US$1,317.10 per ounce, while the November crude contract rose 41 cents to US$48.24 a barrel.November natural gas contracts were down five cents to US$2.91 per mmBTU and December copper was up two cents to US$2.21 a pound.
Canada’s Economy Continues To Rebound
The Canadian economy beat expectations in July with fresh data showing it expanded 0.5% as the country continued moving away from a contraction earlier in the year. Statistics Canada data released Friday for real gross domestic product found the month’s growth was largely tied to resumption of oilsands production. It had been disrupted by massive wildfires that also forced the evacuation of Fort McMurray, Alta., in May. This marked the second month of growth, following a 0.6% gain in June. The increases followed contractions of 0.6% in May and 1.6% in the second quarter of 2016 — the worst quarterly performance since the Great Recession of 2009.
“The big bounce in July GDP has broken the narrative that the Canadian economy was sinking back into the mire, and will dampen down talk that the Bank (of Canada) would need to cut rates again soon — at least due to domestic factors., said Douglas Porter, chief economist with BMO Financial Group. The Bank of Canada has predicted a third-quarter GDP rebound of 3.5% thanks to oil production back online and reconstruction efforts in Alberta’s oilsands region. Statistics Canada said there was a 19% increase in non-conventional oil extraction, which includes oilsands. It was the driving force behind a 3.9% increase in the overall mining, oil and gas extraction sector.
The Statistics Canada report was stronger than a general estimate from economists, who had forecast growth of 0.3%, according to Thomson Reuters. The GDP figures indicate that Canada’s economy began the third quarter on solid footing after it experienced a significant contraction in the second quarter.
Sources: Bloomberg; Investment Executive; advisor.ca,