Wednesday, July 1st20.5°C

Markets look to U.S. for guidance this week, no Canadian figures set for release

TORONTO - A heavy slate of economic data in the U.S. will steer North American markets this week, as traders continue to digest the latest policy announcement from the U.S. Federal Reserve.

The markets will be looking to see if the latest figures on everything from home sales to consumer spending still point to a steady, yet marked recovery of the world's biggest economy.

"Now that the (winter) weather is out of the way, is consumption picking up? These numbers will give us further clarity on that," said Wes Mills, chief investment officer for Scotia Private Client Group.

What will be of particular interest will be data on the durable goods orders on Wednesday. Economists will be looking to see if business investments picked up in May following a long, harsh winter, with the core capital good orders, which excludes defence and transport categories. Traders will also look for the latest figures on existing and new home prices and sales on Monday and Tuesday as an indicator of how strong the U.S. economy is, and whether the data will support sending markets higher this summer.

There have been recent encouraging reports from the U.S., showing that it is on the right track to recovery after the winter made investors cautious about growth.

Recent good news on manufacturing and hiring has boosted confidence in the U.S. economy. Manufacturing is expanding at a healthy pace, and the service industry continues to grow, according to surveys released by the Institute for Supply Management earlier this month.

U.S. employers added 217,000 jobs to their payrolls in May, the fourth consecutive month of solid job gains. The number of Americans filing for unemployment benefits has also dropped close to the levels seen before the recession began in December 2007.

Last week, following a two-day policy meeting, U.S. Federal Reserve hinted that it wasn't too worried about inflation, giving no signs when it might start raising interest rates again. As expected, the Fed also said it would continue to reduce its monthly bond buyback program by US$10 billion a month, to US$35 billion a month, starting in July.

Both the Dow Jones industrials and the S&P 500 finished last week at new all-time highs.

Meanwhile, the Toronto stock market ended the week just below of a new record high close of 15,112.22, which was set on Thursday, boosted by gains in energy, mining and financials. The Friday close was 3.25 points lower, at 15,108.97.

Andrew Pyle, senior wealth adviser at Scotia McLeod in Peterborough, Ont., said the TSX is building on momentum, which may not last into the summer if geopolitical risks like Iraq and Ukraine persist.

"Regardless of your call for stocks this summer, you're going to find a pretty huge consensus that volatility will be higher," he said. "Markets have been driven to levels not sustainable short term, hence we're going to see volatility and that's going to argue for places like gold."

But don't look for any Canadian data next week for guidance — there won't be any.

"It's going to be pretty quiet. Now we're getting into the doldrums. We're a couple of weeks away from earnings reports, so we have that lull. We're a couple of weeks away from the employment numbers for June. Next week we're not going to see a lot of trading on data... Canada is non-existent."

The only major earnings report set for release next week will come from telecom company Shaw Communications (TSX:SJR.B).

In April, the Calgary-based company said it was laying off 400 employees so it could rearrange the structure of its cable, satellite, Internet and home phone services to make them more efficient. Shaw also said it will hire another 100 employees in areas where it is expanding. The telecom has about 14,500 employees across its operations and delivers services to about 3.2 million customers in Canada.

Follow @LindaNguyenTO on Twitter.


The Canadian Press

Read more Business News

Recent Trending

Today's Market
S&P TSX14553.33+63.18
S&P CDNX671.49+4.40
S&P 5002075.92+12.81
CDN Dollar0.7972-0.0035
Natural Gas2.783-0.049

Okanagan Companies
Pacific Safety0.16-0.01
QHR Technologies Inc1.52-0.01
Anavex Life Sciences0.4522+0.0022
Metalex Ventures0.075+0.010
Russel Metals22.73+0.05
Copper Mountain Mining1.16-0.01
Colorado Resources0.08-0.02
ReliaBrand Inc0.006-0.000
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.185+0.015
Decisive Dividend Corporation2.50+0.42


20565983591 Hart Road
4 bedrooms 6 baths
more details
Click here to feature your property
Please wait... loading

Active listening

Has this ever happened to you? You had an initial meeting with a prospect. You asked that prospect what seemed to be all the right questions. You had what felt to you like a good conversation, and bas...

The price of money

Money is not a commodity. By definition, a commodity is a generic product that is bought and sold on price alone. Money, Canadian bills for example, look the same, smell somewhat the same, and are ava...

TFSA strategies

Photo: Thinkstock.comThe federal government has increased the annual contribution limit of Tax-Free Savings Accounts (TFSA) to $10,000. Going forward, the annual limit will no longer be indexed to inf...


Member of BC Press Council