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Canadian Stocks Are Rising As Gold Shines -- Canadian Commentary

The Canadian stock market is up in early trade Friday, after ending yesterday's session nearly unchanged. Mining stocks are leading the way higher and gold stocks are also a source of strength as gold and silver prices continue to head higher. Gold is also benefitting from its safe haven appeal, as investors exit riskier investments.

European markets are solidly in negative territory Friday. The sell-off on Wall Street overnight and the weak performance of the Asian markets are weighing on investor sentiment. Yesterday's disappointing U.S. GDP report and the Bank of Japan's surprise decision to refrain from adding to stimulus have put investors in a foul mood.

Markets in the United States are down modestly in early trade Friday, adding to yesterday's late sell-off. U.S. economic data was largely underwhelming this morning. The Chicago PMI came in weaker than expected, consumer sentiment was unexpectedly revised downward and personal spending increased by less than expected.

The benchmark S&P/TSX Composite Index is up 69.75 points or 0.50 percent at 13,956.18.

On Thursday, the index closed down 1.23 points or 0.01 percent, at 13,886.43. The index scaled an intraday high of 13,966.52 and a low of 13,780.23.

The Diversified Metal and Mining Index is surging 7.56 percent. HudBay Minerals (HBM.TO) is increasing 11.27 percent and Capstone Mining (CS.TO) is advancing 9.46 percent. Teck Resources (TCK-B.TO) is climbing 8.27 percent and Lundin Mining (LUN.TO) is adding 0.84 percent. Sherritt International (S.TO) is up 5.56 percent.

First Quantum Minerals (FM.TO) is jumping 13.21 percent. The company reported first quarter adjusted EPS of $0.09, which topped the consensus estimate of $0.05.

The Gold Index is advancing 3.76 percent. Gold prices have risen above $1280 an ounce this morning as investors exit riskier investments in favor of safe havens.

Yamana Gold (YRI.TO) is increasing 7.52 percent and IAMGOLD (IMG.TO) is higher by 6.50 percent. Barrick Gold (ABX.TO) is rising 5.08 percent and Kinross Gold (K.TO) is climbing 6.16 percent. Royal Gold (RGL.TO) is up 2.37 percent. Goldcorp (G.TO) is gaining 4.12 percent and B2Gold (BTO.TO) is advancing 5 percent. Eldorado Gold (ELD.TO) is adding 2.55 percent.

The Capped Materials Index is also up 3.55 percent. Agnico Eagle Mines (AEM.TO) is climbing 5.48 percent and Franco-Nevada (FNV.TO) is adding 0.49 percent. Silver Wheaton (SLW.TO) is rising 3.89 percent.

The Energy Index is up 1.03 percent. Crude oil prices reached a new yearly high this morning, rising above $46 a barrel.

Crescent Point Energy (CPG.TO) is gaining 0.75 percent and Cenovus Energy (CVE.TO) is rising 2.30 percent. Suncor Energy (SU.TO) is up 0.84 percent and Encana (ECA.TO) is climbing 2.09 percent. Canadian Natural Resources (CNQ.TO) is higher by 0.45 percent and Husky Energy (HSE.TO) is adding 0.69 percent.

Imperial Oil (IMO.TO) is decreasing 0.48 percent, after it reported a first-quarter loss of $73.6 million.

The heavyweight Financial Index is increasing 0.39 percent. Royal Bank of Canada (RY.TO) is higher by 0.77 percent and National Bank of Canada (NA.TO) is advancing 0.24 percent. Bank of Montreal (BMO.TO) is rising 0.33 percent and Bank of Nova Scotia (BNS.TO) is gaining 0.92 percent. Toronto-Dominion Bank (TD.TO) is up 0.58 percent and Canadian Imperial Bank of Commerce (CM.TO) adding 0.28 percent.

The Capped Healthcare Index is losing 1.11 percent. Concordia Healthcare (CXR.TO) is falling 3.28 percent and Extendicare (EXE.TO) is decreasing 1.71 percent.

Valeant Pharmaceuticals International (VRX.TO) is down 1.70 percent. The company announced that it has filed with the U.S. Securities and Exchange Commission its Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

The Capped Telecommunication Services Index is falling 0.14 percent. Manitoba Telecom Services (MBT.TO) is decreasing 0.46 percent and TELUS (T.TO) is dipping 0.08 percent. Rogers Communication (RCI-B.TO) is down 0.04 percent and BCE (BCE.TO) is slipping 0.14 percent

The Capped Industrials Index is losing 0.14 percent. Canadian National Railway (CNR.TO) is lower by 0.78 percent and Canadian Pacific Railway (CP.TO) is surrendering 0.58 percent. Finning International (FTT.TO) is weakening by 1.26 percent and Bombardier (BBD-B.TO) is down 4.90 percent.

Air Canada (AC.TO) is surging 14.01 percent. The company reported first quarter adjusted EPS of C$0.30, compared to C$0.41 a year ago.

The Capped Information Technology Index is falling 0.22 percent. BlackBerry (BB.TO) is down 1.45 percent and Sierra Wireless (SW.TO) is dropping 0.94 percent. Descartes Systems Group (DSG.TO) is losing 0.77 percent.

On the economic front, data from Statistics Canada showed that Canadian economy contracted 0.1 percent in February after expanding 0.6 percent in January. Economists were looking for a 0.2 percent fall.

Separate data showed industrial product price index dropped 0.6 percent on month in March, contradicting expectations for an increase of 0.5 percent. In February, the index fell 1.1 percent.

The euro area economic growth accelerated more than expected in the first quarter, preliminary data from Eurostat showed Friday. Gross domestic product climbed 0.6 percent from prior quarter, following a 0.3 percent rise in the fourth quarter. Economists had forecast the growth rate to improve marginally to 0.4 percent.

Eurozone consumer prices dropped in April on falling energy prices and a slowdown in service costs, flash data from Eurostat showed Friday. The harmonized consumer price index fell 0.2 percent annually, after staying flat in March. Prices had declined 0.2 percent in February. Economists had forecast a 0.1 percent drop for April.

Eurozone jobless rate declined for the first time in three months in March to its lowest level in four-and-a-half years, figures from Eurostat showed Friday. The seasonally adjusted unemployment rate dropped to 10.2 percent, the lowest figure since August 2011, when it was the same. In July that year, the rate was 10.1 percent.

German retail sales dropped unexpectedly in March, figures published by Destatis revealed Friday. Sales slid by real 1.1 percent from February, when it remained flat. This was the first decline in seven months. Economists had forecast a 0.4 percent increase.

The French economy expanded at a faster pace in the first quarter largely driven by a rebound in household spending, the statistical office Insee reported Friday. Gross domestic product grew 0.5 percent sequentially, faster than the 0.3 percent expansion seen in previous quarter. It was also bigger than the expected 0.4 percent rise.

France's consumer prices declined more-than-expected in April, mainly due to the drop in energy prices, preliminary estimates from the statistical office INSEE showed Friday. The consumer price index fell 0.2 percent year-on-year after a 0.1 percent drop in March. Economists had forecast a 0.1 percent decline.

France's household consumption grew less-than-expected in March amid lower spending on food and clothing, data from the statistical office INSEE showed Friday. Consumer spending rose 0.2 percent from February, when it grew 0.5 percent, revised from 0.6 percent. Economists had forecast 0.4 percent increase. In January, spending gained 1 percent.

Consumer confidence in the United Kingdom worsened more-than-expected in April, after remaining steady in the previous month, survey data from Gfk showed Friday. The consumer confidence index dropped to -3 in April from 0 in the preceding month. Economists had expected the index to fall to -1.

The U.K. mortgage approvals declined to a 3-month low in March, while secured lending and consumer credit expanded strongly, the Bank of England reported Friday. The number of mortgages approved in March fell unexpectedly to 71,357 from 73,195 in February. It was forecast to rise to 74,200.

With personal income rising faster than personal spending, the Commerce Department released a report on Friday showing that the U.S. personal savings rate jumped to its highest level in over a year in the month of March.

The report said personal income climbed by 0.4 percent in March after inching up by a downwardly revised 0.1 percent in February. Economists had been expecting income to rise by 0.3 percent compared to the 0.2 percent increase originally reported for the previous month.

Meanwhile, the Commerce Department said personal spending edged up by 0.1 percent in March after rising by an upwardly revised 0.2 percent in February. Spending had been expected to increase by 0.2 percent compared to the 0.1 percent uptick originally reported for the previous month.

Indicating a slow start to the second quarter, MNI Indicators released a report on Friday showing that growth in Chicago-area business activity slowed by much more than expected in the month of April. MNI Indicators said its Chicago business barometer slumped to 50.4 in April after surging up to 53.6 in March.

While a reading above 50 indicates continued growth, the barometer had been expected to show a much more modest drop to 53.4.

Reflecting weakening expectations for future growth, the University of Michigan released a report on Friday showing that U.S. consumer sentiment deteriorated by more than previously estimated in April. The report said the final reading on the consumer sentiment index for April came in at 89.0, reflecting a downward revision from the mid-month reading of 89.7.

The downward revision came as a surprise to economists, who had expected the index to be upwardly revised to 90.4.

In commodities, crude oil futures for May delivery are up 0.30 or 0.65 percent at $46.33 a barrel.

Natural gas for May is up 0.008 or 0.38 percent at $2.086 per million btu.

Gold futures for June are up $21.30 or 1.68 percent at $1,287.70 an ounce.

Silver for May is up $0.287 or 1.64 percent at $17.84 an ounce.

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