Equities
Global equities eased on Friday as markets digested robust economic data that reinforced prospects of interest rates staying higher for longer.
But North American markets bucked the trend, with Wall Street indexes opening higher, rebounding from losses in yesterday’s session on signs of persistent inflation that rekindled monetary policy caution ahead of the Memorial Day long weekend.
The Dow Jones Industrial Average rose 0.06 per cent at the open to 39,089.23, the S&P 500 opened 0.26 per cent higher at 5,281.45, while the Nasdaq Composite gained 0.30 per cent to 16,786.79.
Canada’s main stock index also opened higher as investors cheered softer-than-anticipated retail sales data that cemented bets of June interest rate cut by the Bank of Canada, while materials stocks led gains on higher gold prices. The S&P/TSX Composite Index was up 0.33 per cent to 22,273.72 at the open.
“A set of too-strong-to-be-pleasant data from the U.S. gave a final punch to the bulls,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in a note. “The U.S. services PMI accelerated way faster than expected in May, according to the S&P’s preliminary PMI data, manufacturing activity also improved, while jobless claims came in soft.”
Friday’s analyst upgrades and downgrades
Overseas, the pan-European STOXX 600 was down 0.5 per cent in morning trading, down about 1 per cent over the week. Britain’s FTSE 100 slid 0.35 per cent, Germany’s DAX fell 0.4 per cent and France’s CAC 40 gave back 0.2 per cent.
In Asia, Japan’s Nikkei closed down 1.17 per cent at 38,646.11, while Hong Kong’s Hang Seng dropped 1.38 per cent to 18,608.94.
Commodities
Oil prices crept higher, having been under pressure from lingering concerns that sticky inflation could prolong higher interest rates and curb fuel demand.
The Brent crude July contract was up 41 US cents to US$81.77 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 57 US cents at US$77.44.
“The backdrop of ‘possibly higher-for-longer rates’ weighed significantly on oil prices this week,” said Priyanka Sachdeva, a senior market analyst at Phillip Nova.
In other commodities, gold prices rose 0.4 per cent to US$2338.52 per ounce but was heading for a 3.2-per-cent weekly decline for the week, its biggest weekly drop since December.
Currencies and bonds
The Canadian dollar was trading at 73.10 US cents.
The day range on the loonie was 72.78 US cents to 73.12 US cents in the early premarket period. The Canadian dollar was down about 0.37 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, is up more than 0.5 per cent on the week to 105.06, its largest one-week rise since mid-April.
The euro was up slightly at US$1.08225, but down 0.5 per cent for the week. Britain’s pound was little changed at US$1.269, having touched a two-month high of $1.2761 on Wednesday.
In bonds, the yield on the U.S. 10-year note was at 4.475 per cent ahead of the North American opening bell.
Economic news
G7 finance ministers and central bank governors are meeting in Stresa, Italy (through Saturday)
(8:30 a.m. ET) Canadian retail sales for March. Retail sales decreased 0.2 per cent to $66.4-billion from February. Statistics Canada estimates that retail sales in April increased 0.7 per cent.
(8:30 a.m. ET) Canadian manufacturing sales for April.
(8:30 a.m. ET) U.S. durable and core orders for April. They beat estimates by rising 0.3 per cent and 0.4 per cent from March.
(10 a.m. ET) U.S. University of Michigan consumer sentiment for May.
North American markets open at 9:30 a.m. ET.
With Reuters and The Canadian Press