N.A. stocks continued to claw back ground this week, shrugging off social unrest in the U.S. and a slew of downbeat economic data. All three major U.S. indexes began the week with gains of less than 1% on the heels of a strong rally in May. In Canada, the TSX also closed higher, with the energy sector posting solid gains, as oil prices registered their largest monthly gains on record in May, regaining ground lost during the lockdowns in March and April.
Despite ongoing social unrest over the police killing of George Floyd and growing tensions with China, U.S. stocks continued their ascent on Tuesday as hopes for a swift recovery continued to buoy markets. By Tuesday’s close, the Dow surged 268 points, while the TSX added 158. Meanwhile the loonie strengthened to a near three-month high against the greenback on Tuesday, reaching 73.91 cents (US). Recent gains for the Canadian dollar have come as the U.S. currency has lost its safe- haven appeal.
The rally in N.A. equity markets really picked up steam on Wednesday, with the Nasdaq nearing record highs as investors continue to look past clashes between U.S. police and protestors.
In Canada, the TSX climbed to a three-month high in a broad-based rally. The positive sentiment didn’t help the materials sector, however, as gold prices continued to trend lower. Oil ended the day slightly higher–at one point breaking above US$40 a barrel– before retreating late in the session as doubts emerged over OPEC’s continued commitment to reducing crude supplies. As expected, the Bank of Canada held its overnight rate steady at 0.25%, noting that the economic impact of COVID-19 on the world’s economy “appears to have peaked.”
On Thursday, the U.S. Labor Department reported that 1.9 million Americans filed new claims for state unemployment insurance last week, along with 623,000 new claims for federal aid. Meanwhile Statistics Canada is expected to report on Friday that roughly half a million jobs were lost in May, a marked improvement from April’s loss of nearly two million. On Thursday the loonie retreated from Tuesday’s highs, weighed down by news of Canada’s $3.25-billion trade deficit in April, as exports fell by nearly 30%, the lowest level in more than a decade.
Finally, N.A. markets were mixed on Thursday, with the Dow and TSX finishing flat.
source https://richarddri.ca/n-a-markets-continue-to-rally-despite-social-unrest/
Dri Financial Group 