Global equity markets edged lower on Monday, though supported by U.S. shares hitting new highs, while Treasury bond yields eased and the dollar was little changed as investors awaited jobs data that could sway Federal Reserve monetary policy.
MSCI’s all country world index, which tracks shares across 50 countries, fell 0.1%, as markets in Europe fell. But fresh highs by the S&P 500 and the Nasdaq offset the declines in the major French, German and UK bourses because the global index is U.S.-centric.
Weaker-than-expected U.S. inflation and news of a possible bipartisan U.S. infrastructure agreement boosted risk appetite as the week opened. The infrastructure plan is valued at $1.2 trillion over eight years, of which $579 billion is new spending.
The plan is less than the White House’s initial proposal, but the total amount is likely to be greater than Republicans’ initial figure and may lead Congress to spread the initiative across two bills, said Solita Marcelli, UBS’ chief investment officer for the Americas for its global wealth management division.
While that could provide a tailwind for the reflation trade, Marcelli said “(the spending) will be spread out over a multi-year period, and tax increases could be part of the mix. So the stimulative impact on markets overall may not be very large.”
Stock markets across the world rebounded last week, but growing concern about the spread of the Delta variant of the COVID-19 virus, particularly in Asia, took some shine off on Monday.
Indonesia is battling record-high cases, Malaysia is set to extend a lockdown and Thailand has announced new restrictions.
European stocks, as measured by the pan-European STOXX 600 index, closed down an unofficial 0.53%, still near record highs. Germany’s DAX fell 0.34%, while France’s CAC 40 slid 0.89% and Britain’s FTSE 100 index dipped 0.88%.
Travel and leisure stocks took a particular hit, with the region’s sectoral index falling to a one-month low.
On Wall Street, the Dow Jones Industrial Average fell 167.9 points, or 0.49%, to 34,265.94, the S&P 500 gained 2.4 points, or 0.06%, to 4,283.1 and the Nasdaq Composite added 99.23 points, or 0.69%, to 14,459.62.
Canada’s Toronto Stock Exchange’s S&P/TSX composite index hit an all-time high of 20,273.6 early on Monday. It later erased those gains, as the energy sector fell 2.5% on the lower price of oil.
Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.16 points or 0.02 percent, to 703.61. Australian shares slipped 0.1%. Japan’s Nikkei and South Korea’s benchmark KOPS were barely changed.
Chinese shares were a touch higher, with the CSI300 index up 0.2%. Data over the weekend showed profit growth at China’s industrial firms slowed again in May, as surging raw material prices squeezed margins and pressured factory activity.
Investors will keep a close eye on official factory activity from China due on Wednesday. The manufacturing reading is expected to slow to 50.7 from 51. The private sector Caixin Manufacturing PMI will follow later in the week.
Oil prices slipped on Monday after hitting more than 2-1/2 year highs early in the session, hurt by the spike in COVID-19 cases in Asia ahead of this weeks OPEC+ meeting. [O/R]
Brent crude settled down $1.50, or 1.97%, at $74.68 a barrel. U.S. crude was last down $1.12, or down 1.51%, at $72.93 per barrel.
On Friday, a closely-watched U.S. jobs report, which could point to strong labor demand, will be released for June.
Yields for benchmark 10-year U.S. Treasuries fell, last down 5.6 basis points at 1.4765%. Last week, it notched its largest weekly gain since March.
The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.047 points or 0.05 percent, to 91.898.
The yen was last down 0.21 percent, at $110.5400.
Spot gold was steady at $1,779.70 per ounce by 13:31 p.m. EDT (1731 GMT). U.S. gold futures settled up 0.2% at $1,780.70.[GOL/]
(Reporting by Ritvik Carvalho; additional reporting by Swati Pandey in Singapore; editing by Jason Neely, Chizu Nomiyama and Nick Zieminski)
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
