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Canada’s main stock index rose on Friday as data showing a rise in retail sales and an uptick in house prices helped offset fears of prolonged economic recovery as coronavirus cases rise globally.
At 9:33 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 51.34 points, or 0.32%, at 16,298.06.
Canadian retail sales in July rose by 0.6% and are now higher than they were before the coronavirus pandemic struck, Statistics Canada said on Friday, adding that August sales probably gained 1.1% on the month.
Analysts in a Reuters poll had forecast retail sales would increase by 1.0% from June, when trade jumped by 22.7% as restrictions imposed to fight the outbreak were removed.
“The data continue to suggest that the pace of growth seen in June wasn’t sustained early in the third quarter,” said Royce Mendes of CIBC Economics.
Sales grew in six of the 11 subsectors, with motor vehicles and parts contributing the most. Gas sales also posted gains.
The Nasdaq rose at the open on Friday, shaking off a two-day decline in heavyweight technology stocks, while worries about rising coronavirus cases and a patchy economic recovery weighed on the S&P 500 and Dow.
The Nasdaq Composite gained 63.17 points, or 0.58%, to 10,973.45 at the opening bell. The Dow Jones Industrial Average fell 37.11 points, or 0.13%, at the open to 27,864.87, while the S&P 500 opened higher by just 0.37 points, or flat, at 3,357.38.
Wall Street’s three main indexes bounced earlier this week as investors bet on a loose monetary policy by the Federal Reserve, but gains petered out in the absence of firm details on the central bank’s stimulus plan.
The S&P 500 and the Nasdaq have also come under pressure from investors rotating out of high-flying tech-related stocks and into industrial and transportation firms.
“The market’s in a vacuum right now,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
“Anytime you have news or perception that things are going to be delayed or (you have a) slow growth economy, those (technology-related) stocks get bid. You’ll get these technical bounce days when coronavirus cases spike up and money will move back into tech.”
Oil prices were mixed on Friday after Libyan commander Khalifa Haftar said a blockade on Libyan oil exports would be lifted for one month, countering more bullish signals from an OPEC meeting on Thursday.
Brent crude was down 17 cents at $43.13 a barrel by 1321 GMT while U.S. oil futures ticked up 6 cents to $41.03.
The benchmarks were still set for weekly gains after Hurricane Sally cut U.S. production, Saudi Arabia pressed allies to stick to production quotas and banks including Goldman Sachs predicted a supply deficit.
Pre-blockade Libya was producing around 1.2 million bpd, compared with just over 100,000 bpd now. It is unclear how quickly Libya could ramp up production.
Earlier, Goldman Sachs predicted a market deficit of 3 million barrels per day (bpd) by the fourth quarter and reiterated its target for Brent to reach $49 by the end of the year and $65 by the third quarter of 2021.
Swiss bank UBS also pointed to the possibility of undersupply, forecasting Brent would rise to $45 a barrel in the fourth quarter and to $55 by mid-2021.
The Organization of the Petroleum Exporting Countries and other producers, a group known as OPEC+, are cutting output by 7.7 million bpd and stressed at a meeting on Thursday that it would take action against members not complying with the deal.
“We think (OPEC+) will put on hold plans to taper the cut down to 5.8 million bpd … when the entire group convenes again in December,” RBC analysts said.
Saudi Arabia said an earlier meeting was possible if oil prices fell alongside demand because of a second wave of coronavirus cases.
“The market now feels the ground more stable to maintain $40+ price levels,” said Rystad’s Head of Oil Markets Bjornar Tonhaugen.
Reuters
