TORONTO — Canada’s main stock index resumed where it left off Friday by falling on continued concern about global economic growth.
The market was in a “holding pattern” Monday after its worst selloff of the year as investors continued to digest suggestions of a potential global economic slowdown, says Craig Fehr, Canadian markets strategist for Edward Jones.
The yield curves in Canada and the United States have inverted, suggested dark clouds ahead.
“It’s not surprising to see the Canadian curve inverted at this stage and I think it’s indicative of the rather unique growth outlook that the Canadian economy faces at the moment,” he said in an interview.
Fehr said the concern around the yield curve inverting for the first time in about a decade is warranted since it has been a pretty reliable predictor of the economy.
“It is not a perfect predictor, however, and in fact we’ve seen false positives before in the past where the yield curve did invert and it did not signal an impending recession.”
The S&P/TSX composite index closed down 23.47 points at 16,065.86 after hitting an intraday low of 16,021.00
The energy sector fell 1.9 per cent as crude oil prices were sensitive to Chinese data suggesting its economy was slowing. Crescent Point Energy Corp. was off nearly five per cent, followed by Cenovus Energy Inc, Suncor Energy Inc, Canadian Natural Resources and Encana Corp.
“I think the weakness in oil is probably governing a lot of what we’re seeing from the TSX at the moment,” Fehr said.
The May crude contract was down 22 cents at US$58.82 per barrel and the May natural gas contract was up 0.7 of a cent at US$2.77 per mmBTU.
However, materials gained 1.15 per cent as investors turned defensive stocks and safe havens such as gold.
The April gold contract was up US$10.30 at US$1,322.60 an ounce and the May copper contract was up 1.4 cents at US$2.86 a pound.
Yamana Gold Inc., Eldorado Gold and Barrick Gold Corp. led sector’s gains.
The Canadian dollar traded at an average of 74.52 cents US compared with an average of 74.57 cents US on Friday.
In New York, the Dow Jones industrial average was up 14.51 points at 25,516.83. The S&P 500 index was down 2.35 points at 2,798.36, while the Nasdaq composite was down 5.13 points at 7,637.54.
Fehr said it’s reasonable for markets to take a breather, especially given the 12.2 per cent increase since the beginning of the year, as investors recalibrate their expectations for growth.
“I think investors would be well-served to continue to pay attention, be vigilant and ensure that portfolios are well-protected for additional volatility because that’s what we’re going to get in the near term.”
Companies in this story: (TSX:ABX, TSX:YRI, TSX:ELD, TSX:CPG, TSX:CVE, TSX:CNQ, TSX:ECA, TSX:GSPTSE, TSX:CADUSD=X)
EU incoming economy chief calls for less restrictive budget policies
By Gavin Jones
ROME (Reuters) – The European Union needs looser budgetary policies and an overhaul of its fiscal rulebook, the bloc’s designated economics commissioner said in an article published on Sunday.
Writing in Italian financial daily Il Sole 24 Ore, Paolo Gentiloni said that while the EU’s deficit and debt rules must not be ignored, they needed to be “reviewed and updated”.
“It’s time for countries which have fiscal space to use it, in an overall context of less restrictive budgetary policies,” Gentiloni, due to replace Pierre Moscovici as economic and financial affairs commissioner on Nov. 1, said.
The former Italian prime minister warned that with the EU economy slowing, “the risks of a prolonged period of low growth must not be overlooked” and the task of stimulating the economy “cannot be left to monetary policy alone”.
Gentiloni will have an important role in scrutinizing Italy’s draft 2020 budget which was submitted to the Commission last week.
The budget plan raises next year’s structural deficit — which excludes the effect of GDP growth fluctuations — by 0.1% of gross domestic product, reversing a previous commitment by Rome to lower it by 0.6%.
EU Commission Vice President Valdis Dombrovskis told Reuters on Friday that Brussels would ask Italy for “clarifications” over its budget intentions.
However, even though the budget seems to flout EU rules, many analysts expect the Commission to take a lenient approach and avoid a prolonged dispute with Rome like the one that broke out last year when Italy had a less EU-friendly government.
Gentiloni, who comes from the pro-Europe Democratic Party which now governs with the anti-establishment 5-Star Movement, said it was crucial that the budget plan comes from a government that has a constructive approach toward the EU.
Among what he termed new instruments needed help growth and stability, Gentiloni cited an EU-wide unemployment insurance scheme, without going into details.
(Reporting by Gavin Jones; Editing by Canada News Media)
Lebanese continue protests, demand government to fix economy
Demonstrators, who have been on the streets since Thursday, have pledged to continue marching despite the resignations late on Saturday of four government members from the key political party, Lebanese Forces.
Labour Minister Camille Abousleiman, one of the four to quit the government, told Al Jazeera shortly after the decision that they had “lost faith in the government’s ability to effect change and address the problem”.
Lebanese citizens have been suffering from tax hikes and dire economic conditions in the heavily indebted country.
Lebanon’s public debt stands at around $86bn – more than 150 percent of gross domestic product, according to the finance ministry.
The grievances and anger at the government’s lack of solutions erupted into protests on Thursday, sparked by hikes in taxes including a proposed $0.2 tax on calls via messaging apps such as WhatsApp.
Such calls are the main method of communication for many Lebanese and, despite the government’s swift abandonment of the tax, the demonstrations quickly swelled into the largest in years.
“It is day four and protesters are back on the street. It’s not just in the capital Beirut, but across the country. The message they [protesters] are giving is of defiance and that they will continue to demand the resignation of the government,” said Al Jazeera’s Zeina Khodr, reporting from Beirut.
“While there are tens of thousands on the street protesting, there are still people who are backing the political parties, so it is not going to be easy to bring a change. These people out there want a nationalist leader whose loyalty is to Lebanon and not a political party.”
In an attempt to appease demonstrators, Lebanon’s finance minister, following a meeting with Prime Minister Saad Hariri, announced that they had agreed on a final budget that did not include any additional taxes or fees.
“We want everybody to join us on Sunday and also Monday to topple the government,” one protester said.
On Friday, Hariri gave a 72-hour deadline to his partners in government to agree on a solution to the country’s economic woes without imposing new taxes.
Hezbollah chief Hassan Nasrallah, whose movement is part of the government, warned on Saturday that a change in government would only worsen the situation.
The army on Saturday called on protesters to “express themselves peacefully without harming public and private property”.
|What is the solution to Lebanon’s economic and political crisis?|
On Saturday evening, thousands were packed for a third straight night into the Riyadh al-Solh square in central Beirut, despite security forces having used tear gas and water cannon to disperse similar crowds a day before.
Amnesty International said the security forces’ reaction was excessive, pointing out that the vast majority of protesters were peaceful.
“The intention was clearly to prevent protesters gathering – in a clear violation of the right to peaceful assembly,” it said.
Small groups of protesters have also damaged shop fronts and blocked roads by burning tyres and other obstacles.
The Internal Security Forces said 70 arrests were made on Friday on accusations of theft and arson.
But all of those held at the main police barracks were released on Saturday, the National News Agency (NNA) said.
Al Jazeera and news agencies
Finance Officials Focus on Economy
The IMF managing director, Kristalina Georgieva, said the threat from trade wars was a chief point of discussion for finance officials.
She said the IMF has estimated that the tariffs already imposed or threatened could shave 0.8% off global growth by the end of next year. Much of that stems from the fallout on business confidence.
In trade wars, “everybody loses,” she said. “Policymakers ought to take very seriously their obligations to international cooperation in trade.”
The World Bank’s president, David Malpass, said this week’s finance discussions had focused on how to address multiple challenges.
“Growth is slowing, investment is sluggish, manufacturing activity is soft and trade is weakening,” he said. “Climate change and fragility are making poor countries more vulnerable.”
He said the World Bank was committed to helping to address these challenges to provide a better life for the 700 million people in the world living in extreme poverty.
The IMF, in an updated economic outlook, projected the global economy would expand by 3% this year, the weakest in a decade, and said 90 percent of the world was experiencing a downshift in growth. But the IMF forecast growth will accelerate slightly to 3.4% in 2020, still below the 3.6% rate in 2018.
Jubilee USA, a religious organization fighting global poverty, said in a statement that while the IMF outlined a number of serious threats, the recommendations for dealing with them fell short.
“Risky investing, trade tensions and developing countries borrowing too much are serious concerns for financial stability,” said Eric LeCompte, the group’s executive director.
While Trump’s trade policies were a prime topic of discussion at the meetings, finance officials for the most part avoided direct criticism of the American president.
Christine Lagarde, who dealt with the Trump administration during her last three years as head of the IMF, was a bit more direct in an interview to be broadcast Sunday on CBS’s “60 Minutes.”
Asked about Trump’s trade war with China, she said it would give the world’s economy “a big haircut” and should be resolved by having all parties “sit down like big men, many men in those rooms and put everything on the table, and try to deal bit by bit, piece by piece, so that we have certainty.”
On Trump’s frequent Twitter attacks on Federal Reserve Chairman Jerome Powell, Lagarde said central bankers need to be independent to do their jobs well.
“Market stability should not be the subject of a tweet here or a tweet there. It requires consideration, thinking, quiet and measured and rational decisions,” she said.
Lagarde is scheduled to take over on Nov. 1 as the head of the European Central Bank, which manages monetary policy for the 19 countries who use the euro currency.
A rare glance inside Winnipeg Art Gallery's Inuit Art Centre – CBC.ca
Fireball over Japan part of larger asteroid that might one day hit Earth – Newshub
Asteroid alert: Astronomer spots a 'potentially hazardous' 990m rock flying towards Earth – Express.co.uk
Nelson sensei using martial arts to help Rwandan trauma survivors – Nelson Star
Dragged into U.S. politics, Ukraine’s real challenge is ending a conflict sparked by Russia-backed separatists
Christina Koch and Jessica Meir Execute First All-Woman Spacewalk – Science Times
NASA discovers new risk factor for deadly quake-caused mudslides – The Weather Network
The Orionid meteor shower to peak over Canada tomorrow night | News – Daily Hive
Asteroid horror: NASA panic as space rock half size of Ben Nevis on dangerous Earth-orbit – Express.co.uk
One of these is a deadly viper. The other is a harmless toad. Can you tell the difference? – Science Magazine
This image shows the aftermath of two galaxies colliding – The Loop
Feeding off-world colonies: Leeks and tomatoes can be grown in Martian soil – Digital Trends
Discover over 500 artists at Vancouver's Eastside Culture Crawl – Vancouver Courier
All passengers safe as Montreal-bound Air Transat flight makes emergency stop in Paris
EU incoming economy chief calls for less restrictive budget policies
Gagarin's Start now Soyuz-FG's End as shutters pulled on historic launchpad – The Register
National Arts Centre receives landmark $10-million gift
How the RCMP found Canada's most wanted fugitives with a raven, a Cree trapper and luck
Calgary Board of Education bars elementary student climate change protest
Apology accepted: Vandals return totem pole's stolen hand to Montreal Museum of Fine Arts – Montreal Gazette
NASA stunned: Scientist asks 'was Einstein wrong?' after object breaks laws of physics – Express.co.uk
Door Dash data breach personal information stolen
How do you get rid of fruit flies?
Fall Fairs 2019: The art of the sale (and bazaar and boîte de Noël) – Montreal Gazette
Asteroid alert: NASA tracked rock about to skim Earth at 23,400mph tonight – Will it hit? – Express.co.uk
Barbara Kay: Concordia's Liberal Arts College finds it's not immune to cancel culture – National Post
For better or worse, 29Rooms raises important questions about art in the age of Instagram – CBC.ca
80K people gather Vancouver streets for Climate Strike
Vancouver luxury real estate market to get a boost
Everything you Need to Know About Jagmeet Singh
- Science3 days ago
Classic: Trump Interrupts First All-Women Spacewalk to Get His Facts Wrong – VICE
- Sports7 days ago
Kipchoge shoes spark backlash
- Arts5 days ago
'A great loss to the art community': Former Glenbow president Jeffrey Spalding dead at 67 – Calgary Herald
- Science6 days ago
Nasa genius invents engine concept that travels at 99% the speed of light – and it could ‘break the laws of ph – The Sun
- Science2 days ago
Last Seen In 1986, Halley’s Comet Will Make Its Presence Known This Week With Shooting Star Show – Forbes
- Arts5 days ago
Jeffrey Spalding, renowned artist and curator, dead at 67 – CBC.ca
- News5 days ago
Cops smash human-trafficking ring
- Politics5 days ago
Recent Pollster sees NDP Singh trending up