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Wall Street closes month of gains on hopes of economy reopening – Aljazeera.com

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United States stocks finished mostly higher on Friday after US President Donald Trump announced measures against China in response to new security legislation that was less threatening to the US economy than investors had feared.

The Dow ended the day’s session slightly lower, but all three indexes registered gains for the month and the week with the S&P 500 having its best May since 2009. 

The Dow Jones Industrial Average fell 17.53 points, or 0.07 percent, to close at 25,383.11. The S&P 500, a proxy for the performance of US retirement and college savings accounts, gained 14.58 points, or 0.48 percent, to close the week at 3,044.31. The Nasdaq Composite Index was also up 120.88 points, or 1.29 percent, to settle at 9,489.87.

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The S&P 500 initially extended losses on Friday after Trump said he was directing his administration to begin the process of eliminating special treatment for Hong Kong in response to China’s plans to impose new security legislation on the semi-autonomous territory.

But Trump made no mention of any action that could undermine the phase one trade deal that Washington and Beijing struck early this year – a concern that had cast a cloud over the market throughout the week.

“He began speaking in a very tough tone,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

“The market was worried he was going to announce something substantial, something detrimental to the US economy,” Zaccarelli said. “Then, as he spoke, it became clear the actions being taken were not going to be as dramatic as originally feared.”

Trump also said the US is terminating its relationship with the World Health Organization, something he had threatened to do earlier this month.

Big May

For the month, the Dow added 3.9 percent, the S&P 500 gained 4.5 percent, and the Nasdaq rose 6.8 percent. 

Massive amounts of government stimulus helped lift global stocks in May, offsetting reams of grim economic data. Investors have been buying stocks as lockdowns have been lifted or eased, betting on a speedy recovery.

The S&P 500 gained around four percent for the month, making it the best May for the index since 2009. S&P 500 technology shares gave the index its biggest boost.

Expectations of a quick economic recovery from the coronavirus pandemic have driven the S&P 500 up more than 30 percent from its March lows.

In energy, US crude oil prices jumped more than five percent, while the global benchmark Brent edged higher. West Texas Intermediate (WTI) crude futures rose $1.78 to settle at $35.49 a barrel, while Brent settled up 4 cents at $35.33 a barrel.

Both contracts had their biggest monthly gains in years, supported by production cuts and optimism about demand recovery led by China. 

The latest confrontation between the US and China has fuelled concerns that worsening tensions between the  world’s largest two economies could derail the recent sharp market gains.

The markets were further boosted by the promise of the reopening of  New York City’s economy. New York Governor Andrew Cuomo said Friday that the Big Apple is “on track” to enter phase one of reopening on June 8, and he said five upstate regions will now transition to phase two.

Meanwhile, US Federal Reserve Chair Jerome Powell, speaking in a webcast organised by Princeton University on Friday, reiterated the US central bank’s promise to use its tools to shore up the economy amid the coronavirus pandemic.

SOURCE:
Reuters news agency

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Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

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Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

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