Miners Rebound Offsets Energy Slide as Canada Stocks Edge Higher

Updated on
  • Toronto-Dominion, CIBC earnings top analysts’ expectations
  • Gold producers rebound as traders await Fed clarity Friday

Gold miners rebounded after their steepest selloff in more than a year, while energy producers slipped, leaving Canadian stocks little changed before a hotly anticipated speech from Federal Reserve Chair Janet Yellen.

The S&P/TSX Composite Index rose less than 0.1 percent to 14,630.72 at 4 p.m. in Toronto, after the benchmark fell Wednesday by the most in almost two months. Trading volume today was about 4 percent lower than the 30-day average.

Energy producers lost 0.4 percent, despite crude futures in New York bouncing 1.2 percent from a one-week low. Enbridge Inc. and Imperial Oil Ltd. declined at least 1.7 percent.

Canadian Imperial Bank of Commerce climbed 1.3 percent to the highest in two months. CIBC’s quarterly profit surged 47 percent, lifted by the sale of its minority stake in a U.S. money manager. Toronto-Dominion Bank, the nation’s second-largest lender, slipped 0.1 percent despite higher profit from its U.S. retail operations and wholesale banking.

Toronto-Dominion and CIBC join Royal Bank of Canada and Bank of Montreal in besting analysts’ expectations so far this week, weathering concerns about over-indebted consumers, a sluggish economy and rising impaired loans in the oil and gas industry. Bank of Nova Scotia, the nation’s third-largest lender, is on deck to report on Aug. 30.

Raw-materials producers, meanwhile, rebounded as Kinross Gold Corp. and B2Gold Corp. gained more than 2.7 percent. The group posted a fourth-straight decline and the biggest drop in more than three months Wednesday.

Gold futures in New York slipped 0.4 percent as investors await more clarity from the Federal Reserve on its intentions for interest-rate moves this year. Fed Chair Janet Yellen is set to speak Friday at an annual symposium in Jackson Hole, Wyoming. Traders have priced in 59 percent odds of a U.S. rate increase in December.

Valeant Pharmaceuticals International Inc. added 2 percent, closing near the highest in three months to lift health-care companies. The shares recovered after losing 2.1 percent yesterday amid a selloff in U.S. drugmakers sparked by criticism from lawmakers and Democratic presidential candidate Hillary Clinton over drug prices.

Raw-materials have trimmed their climb this year to 48 percent as the first-half surge in gold prices has stalled amid the uncertainty over central-bank policy. Gold is headed for a monthly drop that would cut gains this year to 25 percent. The materials group remains on track for the first annual advance in six years, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 21 percent in the same period, on pace for the strongest in seven years.

That’s boosted the Canadian equity benchmark to a more than 12 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.3 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.