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Canadian Stocks Are Rallying On Energy Strength - Canadian Commentary

The Canadian stock market is logging a triple digit increase Friday morning, after ending the previous session nearly flat. The energy sector is leading the way higher in early trade, as crude oil prices have climbed back above $50 a barrel. Financial and industrial stocks are also contributing to the early rally.

Markets in Europe are trading modestly to the upside Friday, recovering some of their mid-week losses. Greece's lawmakers approved a reforms package that includes pension cuts and tax hikes as demanded by the country's lenders in return for unlocking another tranche of bailout funds and to start discussions over debt relief.

Markets in the United States are climbing Friday morning, extending the recovery that began yesterday following Wednesday's sharp sell-off. The Trump administration announced that it intends to renegotiate NAFTA, which has helped ease concerns about the President's ability to deliver on his economic agenda due to recent scandals.

The benchmark S&P/TSX Composite Index is up 144.22 points or 0.94 percent at 15,421.42.

On Thursday, the index closed up 3.52 points or 0.02 percent, at 15,277.20. The index scaled an intraday high of 15,336.59 and a low of 15,164.73.

The Energy Index is rising 1.76 percent. Crude oil prices continue to rise Friday morning, touching the psychologically important $50 mark amid expectations the global supply glut is dwindling.

Encana (ECA.TO) is increasing 3.20 percent and Suncor Energy (SU.TO) is climbing 0.91 percent. Imperial Oil (IMO.TO) is up 1.30 percent and Canadian Natural Resources (CNQ.TO) is gaining 1.45 percent. Husky Energy (HSE.TO) is rising 1.75 percent and Crescent Point Energy (CPG.TO) is advancing 2.79 percent. Cenovus Energy (CVE.TO) is higher by 2.38 percent and Enbridge (ENB.TO) is adding 0.93 percent.

The heavyweight Financial Index is increasing 0.94 percent. Bank of Nova Scotia (BNS.TO) is gaining 1.25 percent and Bank of Montreal (BMO.TO) is advancing 0.89 percent. Royal Bank of Canada (RY.TO) is rising 0.84 percent and National Bank of Canada (NA.TO) is up 1.46 percent. Toronto-Dominion Bank (TD.TO) is climbing 1.09 percent and Canadian Imperial Bank of Commerce (CM.TO) is higher by 0.90 percent.

The Capped Materials Index is up 1.14 percent. Agnico Eagle Mines (AEM.TO) is rising 0.45 percent and Franco-Nevada (FNV.TO) is higher by 0.60 percent. Silver Wheaton (SLW.TO) is advancing 0.85 percent and Agrium (AGU.TO) is climbing 2.50 percent. Potash Corp. of Saskatchewan (POT.TO) is also increasing 2.59 percent.

The Capped Industrials Index is up 0.87 percent. Canadian National Railway (CNR.TO) is gaining 1.14 percent and Canadian Pacific Railway (CP.TO) is rising 1.20 percent. Air Canada (AC.TO) is increasing 2.61 percent and Bombardier (BBD-B.TO) is adding 0.97 percent. Finning International (FTT.TO) is also climbing 1.09 percent.

The Gold Index is advancing 0.50 percent. Gold prices are little changed Friday morning after significant volatility earlier in the week.

IAMGOLD (IMG.TO) is climbing 0.17 percent and Barrick Gold (ABX.TO) is increasing 0.22 percent. Eldorado Gold (ELD.TO) is advancing 2.41 percent and Yamana Gold (YRI.TO) is advancing 0.54 percent. B2Gold (BTO.TO) is rising 1.20 percent and Kinross Gold (K.TO) is gaining 0.17 percent.

The Capped Information Technology Index is gaining 0.35 percent. BlackBerry (BB.TO) is up 0.51 percent and Constellation Software (CSU.TO) is climbing 0.26 percent. Descartes Systems Group (DSG.TO) is higher by 1 percent and Sierra Wireless (SW.TO) is rising 1.84 percent.

The Capped Telecommunication Services Index is up 0.26 percent. Rogers Communications (RCI-B.TO) is increasing 0.10 percent and BCE (BCE.TO) is rising 0.38 percent. TELUS (T.TO) is also climbing 0.31 percent.

The Capped Healthcare Index is lower by 0.65 percent. Valeant Pharmaceuticals International (VRX.TO) is weakening by 1.58 percent.

On the economic front, Data from Statistics Canada showed that the consumer price index rose a seasonally adjusted 0.5 percent on month in April, matching expectations. This follows a 0.2 percent drop in March.

Core inflation, excluding food and energy, ticked up 0.1 percent month-on-month in April, after a 0.1 percent decline a month ago.

Separate data showed that Canadian retail sales rose 0.7 percent on a monthly basis in March, surpassing forecasts for a 0.3 percent uptick. The February reading was revised to a 0.4 percent fall, whose reading was previously reported as 0.6 percent decline.

Core retail sales fell 0.2 percent month-over-month in March, slightly steeper than previous month's 0.1 percent slide. Economists were looking for a gain of 0.2 percent.

Eurozone consumer confidence strengthened for a third consecutive month in May to its highest level in nearly a decade, preliminary data from the European Commission showed Friday. The flash consumer confidence index climbed to -3.3 from April's -3.6. Economists had forecast a score of -3.

The euro area current account surplus declined in March largely due to widening shortfall on secondary income, figures from the European Central Bank showed Friday. The current account surplus fell to a seasonally adjusted EUR 34.1 billion in March from a record EUR 37.8 billion in February.

Germany's producer prices increased at the fastest pace since late 2011, figures from Destatis showed Friday.

Producer prices grew by more-than-expected 3.4 percent year-on-year in April, faster than the 3.1 percent rise in March. This was the biggest increase since December 2011. Economists had forecast 3.2 percent increase.

In commodities, crude oil futures for June delivery are up 0.87 or 1.76 percent at $50.22 a barrel.

Natural gas for June is up 0.073 or 2.29 percent at $3.255 per million btu.

Gold futures for June are down $2.10 or 0.17 percent at $1,250.70 an ounce.

Silver for July is up $0.12 or 0.72 percent at $16.79 an ounce.

by RTTNews Staff Writer

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