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Canadian Stocks Are Under Pressure Due To Trump Concerns - Canadian Commentary

The Canadian stock market is trading firmly in negative territory Wednesday morning. Trump's economic agenda is in doubt after numerous scandals and missteps, the latest revolving around the dismissal of FBI Director James Comey.

The majority of the Canadian sectors are trading in the red this morning, with the exception of the gold stocks. Investors are exiting riskier investments in favor of safe havens like gold. Meanwhile, energy stocks are paring their losses following the release of the U.S. inventory report.

Markets in Europe are losing ground Wednesday, extending losses from the previous day. The markets got off to a weak start due to the growing worries about political turmoil in the U.S. The markets have slipped further following the weak opening on Wall Street.

Markets in the United States and falling in early trade Wednesday. A lack of U.S. economic data is keeping some investors on the sidelines. Meanwhile, concerns over the political turmoil in Washington is weighing on investor sentiment. Reports that President Trump asked former FBI Director James Comey to quash an investigation of former National Security Adviser Michael Flynn has investors concerned.

The benchmark S&P/TSX Composite Index is down 159.68 points or 1.03 percent at 15,383.65.

On Tuesday, the index closed down 86.14 points or 0.55 percent, at 15,543.33. The index scaled an intraday high of 15,700.55 and a low of 15,542.57.

The heavyweight Financial Index is decreasing 1.43 percent. Bank of Nova Scotia (BNS.TO) is losing 1.20 percent and Bank of Montreal (BMO.TO) is declining 1.23 percent. Royal Bank of Canada (RY.TO) is falling 1.47 percent and National Bank of Canada (NA.TO) is down 1.62 percent. Toronto-Dominion Bank (TD.TO) is weakening by 1.28 percent and Canadian Imperial Bank of Commerce (CM.TO) is lower by 0.90 percent.

The Energy Index is falling 1.30 percent. Crude oil prices are slightly higher Wednesday morning, following the release of the U.S. inventory data.

U.S. crude inventories rose 882,000 barrels at the end of last week, the American Petroleum Institute (API) said on Tuesday, compared to a decline of 2.3 million barrels seen by analysts.

The U.S. EIA reported this morning that U.S. crude inventories dropped by 1.8 million barrels last week.

Imperial Oil (IMO.TO) is down 0.87 percent and Canadian Natural Resources (CNQ.TO) is losing 1.44 percent. Husky Energy (HSE.TO) is falling 1.83 percent and Cenovus Energy (CVE.TO) is lower by 2.69 percent. Crescent Point Energy (CPG.TO) is declining 1.98 percent and Enbridge (ENB.TO) is surrendering 2.17 percent. Crescent Point Energy (CPG.TO) decreasing 1.98 percent and Encana (ECA.TO) is dropping 1.32 percent. Suncor Energy (SU.TO) is also forfeiting 1.05 percent.

The Capped Information Technology Index is losing 1.24 percent. BlackBerry (BB.TO) is down 0.29 percent and Constellation Software (CSU.TO) is weakening by 2.33 percent. Sierra Wireless (SW.TO) is declining 2.70 percent and Descartes Systems Group (DSG.TO) is down 0.60 percent.

The Capped Industrials Index is down 1.24 percent. Canadian National Railway (CNR.TO) is losing 1.53 percent and Canadian Pacific Railway (CP.TO) is falling 1.71 percent. Air Canada (AC.TO) is decreasing 2.89 percent and Finning International (FTT.TO) is lower by 1.08 percent.

Bombardier (BBD-B.TO) is weakening by 1.43 percent. The company said that it has reached a long-term partnership agreement with IBM to support the global integration of Information Technology services across Bombardier Transportation and the Company's aerospace segments.

The Capped Healthcare Index is lower by 1.17 percent. Valeant Pharmaceuticals International (VRX.TO) is weakening by 3.19 percent and Concordia International (CXR.TO) is dropping 5 percent. Extendicare (EXE.TO) is also falling 0.88 percent.

The Capped Telecommunication Services Index is down 1.01 percent. Rogers Communications (RCI-B.TO) is decreasing 1.13 percent and BCE (BCE.TO) is falling 0.92 percent. TELUS (T.TO) is also weakening by 1.23 percent.

The Gold Index is advancing 1.85 percent. Gold prices have surged to nearly $1260 an ounce Wednesday morning, due to the safe haven appeal of the precious metal.

IAMGOLD (IMG.TO) is climbing 2.68 percent and Barrick Gold (ABX.TO) is increasing 2.09 percent. Goldcorp (G.TO) is higher by 1.47 percent and Yamana Gold (YRI.TO) is advancing 3.21 percent. B2Gold (BTO.TO) is rising 2.68 percent and Kinross Gold (K.TO) is gaining 2.98 percent. Eldorado Gold (ELD.TO) is adding 1.09 percent.

The Capped Materials Index is up 0.44 percent. Agnico Eagle Mines (AEM.TO) is rising 2.23 percent and Franco-Nevada (FNV.TO) is higher by 0.53 percent. Silver Wheaton (SLW.TO) is advancing 0.85 percent.

On the economic front, a report from Statistics Canada this morning showed that Canadian manufacturing sales increased 1.0 percent to a record $53.9 billion in March, reflecting higher sales in the transportation equipment and food industries. The result was in line with economists' expectations.

Eurozone inflation accelerated as estimated in April, final data from Eurostat showed Wednesday. Headline inflation climbed to 1.9 percent from 1.5 percent in March. Inflation has returned to the European Central Bank's target of 'below, but close to 2 percent.'

Eurozone construction output declined in March after rebounding in the previous month, data published by Eurostat showed Wednesday. Construction output dropped 1.1 percent in March from February, when it grew 5.5 percent.

The UK unemployment rate declined in the first quarter despite a slowdown in economic growth, while earnings growth remained weak amid rising inflation.

The ILO jobless rate eased to 4.6 percent in the three months to March, the lowest since 1975, data from the Office for National Statistics showed Wednesday.

The rate dropped from 5.1 percent in the previous year and 4.7 percent in the three months to February.

The number of unemployed decreased by 53,000 from the previous quarter to 1.54 million in the three months to March.

British household finances are experiencing the most severe strain since the middle of 2014, amid subdued pay growth and as living costs rose at the fastest pace in nearly three years, survey data from IHS Markit and Ipsos Mori showed Wednesday.

The IHS Markit Household Finance Index climbed to 42.4 from 42.5 in April. The latest reading was well below the post-crisis peak of 46.2 seen in January 2015.

In commodities, crude oil futures for June delivery are up 0.23 or 0.47 percent at $48.89 a barrel.

Natural gas for June is down 0.039 or 1.21 percent at $3.191 per million btu.

Gold futures for June are up $21.29 or 1.72 percent at $1,257.70 an ounce.

Silver for July is up $0.258 or 1.54 percent at $17.005 an ounce.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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