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Canadian Stocks Are Extending Recent Losses - Canadian Commentary

The Canadian stock market is losing ground in early trade Friday, adding to the losses of the past few sessions. Financial stocks are among the hardest hit this morning, while energy stocks are struggling due to a pullback in crude oil prices.

Investor sentiment continues to be negatively impacted by the war of words being waged by the leaders of North Korea and the United States. After North Korea claimed President Trump is "driving" the Korean peninsula to the "brink of a nuclear war," the president responded with a tweet suggesting the U.S. is prepared to take military action against the communist nation.

"Military solutions are now fully in place, locked and loaded, should North Korea act unwisely. Hopefully Kim Jong Un will find another path!" Trump tweeted.

The majority of the European markets are trading in the red Friday, adding to the heavy losses of the previous two sessions. The markets have endured their worst performance since early November this week, due to the escalating tensions between North Korea and the United States in the last few days.

Markets in the United States are attempting to rebound in early trade Friday. Bargain hunting appears to be playing a role, as investors step in to buy stocks at reduced levels following the pullback of the past few sessions.

The benchmark S&P/TSX Composite Index is down 53.12 points or 0.35 percent at 15,021.13.

On Thursday, the index closed down 143.08 points or 0.94 percent, at 15,074.25. The index scaled an intraday high of 15,209.55 and a low of 15,056.84.

The heavyweight Financial Index is decreasing 0.70 percent. Royal Bank of Canada (RY.TO) is falling 0.66 percent and Bank of Montreal (BMO.TO) is losing 0.90 percent. Canadian Imperial Bank of Commerce (CM.TO) is down 0.82 percent and National Bank of Canada (NA.TO) is declining 0.97 percent. Toronto-Dominion Bank (TD.TO) is lower by 0.56 percent and Bank of Nova Scotia (BNS.TO) is weakening by 0.79 percent.

The Capped Telecommunication Services Index is down 0.61 percent. BCE (BCE.TO) is falling 0.26 percent and Rogers Communications (RCI-B.TO) is also lower by 0.26 percent.

TELUS (T.TO) is decreasing 1.47 percent after it reported a smaller-than-expected profit.

The Capped Healthcare Index is lower by 0.39 percent. Concordia International (CXR.TO) is falling 7.74 percent after its second quarter loss widened from a year ago.

The Energy Index is falling 0.13 percent. Crude oil prices are falling for a second day Friday, despite word from the International Energy Agency that the global oil market is re-balancing.

Global oil demand is expected to reach 1.5 million barrels per day this year, the agency said, revising up its July forecast from 1.4 million. In 2018 demand is seen growing by a further 1.4 million.

Crescent Point Energy (CPG.TO) is declining 1.66 percent and Suncor Energy (SU.TO) is weakening by 0.22 percent. Encana (ECA.TO) is surrendering 0.16 percent and Enbridge (ENB.TO) is down 0.38 percent. Canadian Natural Resources (CNQ.TO) is slipping 0.13 percent.

The Capped Industrials Index is down 0.10 percent. Canadian National Railway (CNR.TO) is declining 0.07 percent and Bombardier (BBD-B.TO) is surrendering 0.78 percent. Finning International (FTT.TO) is weakening by 0.61 percent.

The Capped Materials Index is down 0.08 percent.

The Capped Information Technology Index is gaining 0.62 percent. Sierra Wireless (SW.TO) is advancing 1.73 percent and BlackBerry (BB.TO) is rising 0.72 percent.

The Gold Index is advancing 0.31 percent. Gold prices continue to rise Friday morning, as tensions between North Korea and the U.S. have escalated.

Kinross Gold (K.TO) is advancing 0.37 percent and Eldorado Gold (ELD.TO) is climbing 1.62 percent. IAMGOLD (IMG.TO) is increasing 3 percent and Yamana Gold (YRI.TO) is higher by 0.73 percent.

Automotive supplier Magna International Inc. (MG.TO) Friday said it now expects fiscal 2017 total sales between $37.7 billion and $39.4 billion, higher than previous estimate of $36.6 billion to $38.3 billion. The stock is declining 2.06 percent.

On the economic front, Germany's consumer price inflation accelerated to a three-month high in July, final data from Destatis showed Friday.

Inflation, based on consumer prices, grew 1.7 percent annually, slightly faster than the 1.6 percent increase registered in June. This was the fastest since April and came in line with the flash estimate published on July 28.

Germany's wholesale price inflation eased to an eight-month low in July, data from Destatis showed Friday. Wholesale prices advanced 2.2 percent on a yearly basis in July, slower than the 2.5 percent increase in June. This was the weakest growth since November 2016, when prices gained 0.8 percent.

French inflation held steady in July, as estimated initially, final data from the statistical office Insee showed Friday. Consumer prices climbed 0.7 percent year-on-year in July, the same rate as seen in June and in line with the preliminary estimate.

French payroll employment increased notably in the second quarter, the statistical office Insee said Friday. Private payroll employment climbed 91,700 or 0.5 percent from the first quarter. Employment had advanced 57,700 or 0.3 percent in the first quarter.

A report released by the Labor Department on Friday showed a modest uptick in consumer prices in the U.S. in the month of July. The Labor Department said its consumer price index inched up by 0.1 percent in July after coming in unchanged in June. Economists had expected prices to rise by 0.2 percent.

In commodities, crude oil futures for September delivery are down 0.43 or 0.88 percent at $48.16 a barrel.

Natural gas for September is down 0.01 or 0.34 percent at $2.975 per million btu.

Gold futures for December are up 2.00 or 0.16 percent at $1,292.10 an ounce.

Silver for September is down 0.05 or 0.29 percent at $17.015 an ounce.

by RTTNews Staff Writer

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