- Largest lenders set to report quarterly earnings next week
- Oil producers rebound as crude futures post weekly advance
Canadian stocks rose, mirroring a rally in global markets, as financial and commodity shares rebounded Friday after coming under pressure this week on renewed speculation the Federal Reserve may raise interest rates as soon as June.
The benchmark S&P/TSX Composite Index rose 0.7 percent to 13,919.58 at 4 p.m. in Toronto. The gauge rose 1.2 percent in the week after retreating 0.7 percent in the previous two days following minutes from the Fed’s April meeting that spurred traders to increase bets on higher borrowing costs next month.
Bank of Nova Scotia and Manulife Financial Corp. added at least 0.6 percent Friday to lead financial services companies higher. The nation’s largest lenders are scheduled to report second-quarter earnings next week, starting with Bank of Montreal on May 25.
Energy producers climbed 0.8 percent, rebounding from a two-day drop. All 10 industries in the S&P/TSX advanced on trading volume 21 percent below the 30-day average at this time of the day. The S&P/TSX now trades at 21.2 times earnings, about 12 percent higher than the 19 times valuation of the S&P 500.
Crude futures in New York ended the day lower, bringing their weekly gain to 3.3 percent. West Texas Intermediate traded below $48 a barrel. Firefighters successfully defended Suncor Energy Inc. and Syncrude Canada Ltd.’s oil-sands operations and rain brought some relief to the Alberta oil-sands ravaged by wildfires. The respite renews prospects for a restart to operations.
Data today showed retail sales in Canada fell 1 percent in March, more than economists forecast for the month from February’s record high, led by a drop in automobile sales. A separate report showed Canada’s inflation rate accelerated for the first time in three months in April. Core inflation, excluding volatile products, climbed while economists had forecast it would slow.
“Smoothing out the volatility leaves sales up a still-strong 5.4 percent year-over-year for all of the first quarter,” Robert Kavcic, a senior economist at BMO Capital Markets, said in a note. “The big picture here is that the underlying firmness in core inflation offsets the generally soft retail results today. That combination reinforces our view that the Bank of Canada will sit tight on the sidelines next week.”