Market Watch: May 27

North American stocks bounced back on Wednesday, however, as Fed minutes from its recent policy meeting indicated few surprises in the Fed’s ongoing battle with inflation. All three major U.S. indexes recorded modest gains, while the TSX hit its highest mark in more than a week, boosted by surprisingly strong bank earnings and higher oil prices.

It was another strong day for North American indexes Thursday as strong results from U.S. retailers and waning concerns of an over-aggressive Fed boosted investor sentiment. It was also a strong day for tech, as the Nasdaq climbed nearly 2.7 per cent, while the S&P 500 rose two per cent and the Dow added 1.6 per cent. All three U.S. indexes are on track to snap a prolonged weekly losing streak. In Canada, the TSX turned in another strong performance, rising nearly 150 points.

North American Markets Regain Ground

For the four trading days covered in this report, the Dow jumped 1,375 points to close at 32,637, the S&P 500 added 157 points to settle at 4,058, while the tech-heavy Nasdaq rose 386 points to close at 11,740. In Canada, the TSX climbed 335 points to end at 20,532.

Strategy

Canadian retail sales were unchanged in March, below expectations of a 1.4 per cent increase

Canadian retail sales were unchanged in March, below expectations of a 1.4 per cent increase. While March receipts were up in 10 out of 11 subsectors led by higher sales at gasoline stations, lower sales at motor vehicle and parts dealers erased the gains in the remaining sectors. In volume terms, sales were down one per cent. Receipts at gasoline stations were up 7.4 per cent in March, the third consecutive increase and tenth gain in the last 11 months. Gasoline prices rose 11.8 per cent monthly, partly due to uncertainty surrounding supply following Russia’s invasion of Ukraine. Contrarily, core retail sales, which exclude gasoline and automotive and parts, increased 1.5 per cent in March.

Meantime, the CFIB Business Barometer, a measure of small business confidence over the next 12 months, fell three points to 61.6 in May. Despite the slight drop, the general state of business is on the upswing and better than in the previous months, with 43 per cent of businesses reporting being in a good state, compared to 16 per cent who said they were in a bad shape. 54 per cent of the businesses surveyed said that labour shortage was the biggest factor limiting business growth in May, while fuel and energy prices continued to be the major cost constraint as reported by 76 per cent of businesses.

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Market Watch: May 27

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