Canada's main stock index wavered as morning became afternoon on Friday, as slower-than-expected economic growth in the first quarter reinforced hopes of a June rate cut from the Bank of Canada, while in-line U.S. inflation reading also boosted stocks.
The S&P/TSX Composite Index slid 37.41 points to move toward midday Friday at 22,034.40
The Canadian dollar gained 0.23 cents at 73.30 cents U.S.
BRP Inc. shares fell $1.93, or 2.1%, to $88.77, after the powersports vehicles and marine products company lowered its annual revenue forecast amid profit headwinds and high interest rates.
Laurentian Bank of Canada reported a loss for the second quarter, as the lender recorded impairment and restructuring charges of $144.4 million, taking its shares down by 4.7%. The shares flopped $1.45, or 5.4%, to $25.24
Economically speaking, Statistics Canada says its March GDP was essentially unchanged as both goods-producing and services-producing industries showed little movement in March. GDP increased 0.4%, however, in the first quarter, after posting no change in the fourth quarter of 2023.
The Bank of Canada is expected to initiate interest rate cuts in its June 5 monetary policy meeting, with a 64% probability, while markets are pricing in 35 bps cuts from the Fed this year, with a 49% chance of a rate cut in September.
ON BAYSTREET
The TSX Venture Exchange dipped 2.61 points to 612.35.
Eight of the 12 subgroups had climbed into the positive range nearing noon, with communications taking on 1%, consumer discretionary stocks up 0.4%, and health-care improving 0.3%.
The four in the red were weighed most by gold, dulling 1.5%, materials, weakening 1.1%, and information technology, off 0.9%.
ON WALLSTREET
The S&P 500 slipped on Friday, as investors took profits on Nvidia and this week’s market breather continued despite the Federal Reserve’s preferred inflation measure coming in largely around expectations.
The Dow Jones Industrial Average regained 62.72 points to 38,174.20, buoyed by UnitedHealth’s advance of more than 2%.
The S&P 500 slid 27.69 points to 5,207.79.
The NASDAQ jettisoned 213.93 points, or 1.3%, to 16,523.15, as Nvidia and other megacap technology stocks took a hit.
The S&P 500 was set to lose 1.8%, while the NASDAQ was poised to retreat 2.4%. Both indexes were on pace to snap five-week win streaks. The Dow slipped 2.3%, heading for a second straight week of losses.
Despite those moves, it’s shaping up to be a winning May, with each of the major benchmarks set to register a sixth positive month in seven. The Dow is up 0.9% this month, while the S&P 500 is higher by almost 3.5%. The tech-heavy NASDAQ Composite has gained 5.5%.
A chunk of May’s strength can be attributed to a surge in Nvidia, which released blockbuster earnings last week. Though the artificial intelligence darling’s stock fell more than 1% on Friday, shares are poised to end the month more than 26% higher. Tesla, Microsoft, Meta and Netflix also all shed more than 1% on Friday, weighing down the broader market.
Traders also reacted to the latest corporate earnings results. Dell Technologies tumbled 22% even after its first-quarter results beat expectations. Cloud security stock Zscaler popped 5.7%, while developer data platform MongoDB plunged almost 25%. Apparel retailer Gap jumped 26%.
The core personal consumption expenditures price index increased 0.2% in April, in line with the consensus forecast of economists polled by Dow Jones, according to data released Friday. Core PCE rose 2.8% on an annualized basis, slightly above the 2.7% prediction from economists.
Prices for the 10-year Treasury gained a bit of ground, lowering yields to 4.51% from Thursday’s 4.55%. Treasury prices and yields move in opposite directions.
Oil prices shed 82 cents to $77.09 U.S. a barrel.
Gold prices docked $16.60 to $2,349.90.
