By Bill Curry
Much ado about Treasury yields
The 10-year U.S. Treasury yield rose above 3% earlier this week for the first time since early 2014. The news initially sent a chill through U.S. markets, stoking concerns over higher borrowing rates for companies already facing rising costs—and as early quarterly results in the industrials sector failed to deliver positive outlooks. U.S. stocks climbed higher on Thursday, however, after a strong round of corporate earnings reports, led by the technology sector. Also in the U.S., initial jobless claims, a measure of layoffs across the U.S., fell to their lowest levels since December 1969. The tightening job market increases the odds that the Fed will be considering additional rates hikes in 2018. Turning to oil, crude prices climbed higher early in the week as investors weighed concerns that the U.S. could withdraw from the Iranian nuclear deal—something they say could tighten global supplies. Prices declined somewhat after a meeting between U.S. President Donald Trump and French President Emmanuel Macron suggested there might not be renewed sanctions against Iran. In Canada, equity prices showed signs of life, buoyed by an upbeat economic assessment from BoC Governor Stephen Poloz, along with tentative signs of progress in the NAFTA negotiations and rising oil prices, which helped lift the energy sector. Turning to the eurozone, the ECB’s governing council left interest rates and its bond-buying program unchanged after a meeting Thursday, noting that officials want to better understand a recent slowdown in the eurozone economy before taking any new steps to phase out easy money. In response to the news, the euro fell to its lowest level since mid-January.
A week of ups and downs
It was a bumpy ride for North American equities this week. For the four days covered in this report, the Dow dropped 140 points to close at 24,322, the S&P 500 fell just 3 points to end at 2,667 and the Nasdaq declined 27 points to settle at 7,118. The TSX bucked the trend, adding 153 points to finish at 15,637.
This publication has been prepared by ScotiaMcLeod, a division of Scotia Capital Inc. (SCI). This publication is intended as a general source of information and should not be considered as personal investment or tax advice. We are not tax advisors and we recommend that individuals consult with their professional tax advisor before taking any action based upon the information found in this publication. Opinions, estimates, and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither SCI nor its affiliates accepts liability whatsoever for any loss arising from any use of this publication or its contents. This publication is not, and is not to be construed as, an offer to sell or solicitation of an offer to buy any securities and/or commodity futures contracts. SCI, its affiliates and/or their respective officers, directors, or employees may from time to time acquire, hold, or sell securities and/or commodities and/or commodity futures contracts mentioned herein as principal or agent. SCI and/or its affiliates may have acted as financial advisor and/or underwriter for certain of the corporations mentioned herein and may have received and may receive remuneration for same. All insurance products are sold through Scotia Wealth Insurance Services Inc., the insurance subsidiary of Scotia Capital Inc., a member of the Scotiabank Group. When discussing life insurance products, ScotiaMcLeod advisors are acting as Insurance Advisors (Financial Security Advisors in Quebec) representing Scotia Wealth Insurance Services Inc. This publication and all the information, opinions, and conclusions contained in it are protected by copyright. This report may not be reproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions, and conclusions contained in it be referred to without in each case the prior express consent of SCI.
Red Deer's fire ban still in effect
City officials are reminding residents a previously issued fire ban is still in effect for The City...
READ MORE +
Trudeau formally announces he'll run again in next year's election
MONTREAL — Justin Trudeau will run again in the 2019 federal election. The Liberal leader ...
READ MORE +
All eyes on Andrew Scheer as Conservative convention set for Halifax
OTTAWA — After a week of internal caucus squabbles, Conservative Leader Andrew Scheer will try to...
READ MORE +
Join the Discussion
We are happy to provide a forum for commenting and discussion. Please respect and abide by the house rules: Keep it clean, keep it civil, keep it truthful, stay on topic, be responsible, share your knowledge, and please suggest removal of comments that violate these standards. See full commenting rules.