TSX closes lower despite GDP growth... The economy grew more than expected in May... Forcing mortgage lenders to share risk could be a risk itself...
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TSX closes lower despite GDP growth
Growth for the Canadian economy, a jump for Bombardier stocks and oil hitting a 2-month high – you’d expect a gain for the main TSX index but it wasn’t to be.
Friday’s session ended lower as oil gains were offset by losses elsewhere in the energy group, financials slipped and consumer brands also weakened. Materials, utilities and IT were the only sector groups to close higher.
Wall Street closed mixed with the Dow slightly higher while the S&P500 and Nasdaq ended the session negative. European and most Asian indexes also ended with losses.
The S&P/TSX Composite Index closed down 62.71 (0.41%)
The Dow Jones closed up 33.76 (0.15%)
Oil is trending higher (Brent $52.57, WTI $49.77 at 5pm)
Gold is trending higher (1268.60 at 5pm)
The loonie is valued at U$0.8037
The economy grew more than expected in May
Canada’s economy grew 0.6% in May, building on the previous six months of growth. Fourteen of the 20 industrial sectors gained.
The gains were driven by a 1.6% rise for goods-producing industries, led by a 4.6% gain for mining, quarrying, and oil and gas extraction. Finance and insurance services led the 0.2% rise for service industries.
BMO Capital Markets chief economist Doug Porter said that GDP “keeps on rolling” adding that “with this powerful momentum, even if some of it is a passing phase, it will take a lot to knock the Bank of Canada off its gradual tightening path.”
Forcing mortgage lenders to share risk could be a risk itself
If mortgage lenders were forced to share more of the risk of mortgage delinquencies, it could be damaging for the Canadian housing market.
A report obtained under an access-to-information request by the Canadian Press shows that the federal finance department is concerned that lenders would restrict lending, with a resulting fall in house prices leading to a risky market.
It will be some months before the government has enough data to make a decision on risk-sharing so a decision is unlikely to be made this year.
Growth for the Canadian economy, a jump for Bombardier stocks and oil hitting a 2-month high – you’d expect a gain for the main TSX index but it wasn’t to be.
Friday’s session ended lower as oil gains were offset by losses elsewhere in the energy group, financials slipped and consumer brands also weakened. Materials, utilities and IT were the only sector groups to close higher.
Wall Street closed mixed with the Dow slightly higher while the S&P500 and Nasdaq ended the session negative. European and most Asian indexes also ended with losses.
The S&P/TSX Composite Index closed down 62.71 (0.41%)
The Dow Jones closed up 33.76 (0.15%)
Oil is trending higher (Brent $52.57, WTI $49.77 at 5pm)
Gold is trending higher (1268.60 at 5pm)
The loonie is valued at U$0.8037
The economy grew more than expected in May
Canada’s economy grew 0.6% in May, building on the previous six months of growth. Fourteen of the 20 industrial sectors gained.
The gains were driven by a 1.6% rise for goods-producing industries, led by a 4.6% gain for mining, quarrying, and oil and gas extraction. Finance and insurance services led the 0.2% rise for service industries.
BMO Capital Markets chief economist Doug Porter said that GDP “keeps on rolling” adding that “with this powerful momentum, even if some of it is a passing phase, it will take a lot to knock the Bank of Canada off its gradual tightening path.”
Forcing mortgage lenders to share risk could be a risk itself
If mortgage lenders were forced to share more of the risk of mortgage delinquencies, it could be damaging for the Canadian housing market.
A report obtained under an access-to-information request by the Canadian Press shows that the federal finance department is concerned that lenders would restrict lending, with a resulting fall in house prices leading to a risky market.
It will be some months before the government has enough data to make a decision on risk-sharing so a decision is unlikely to be made this year.
