rI market report, May 11, 2012
The Toronto stock market edged sideways Friday with data showing another month of strong job creation in Canada and continued uncertainty in other quarters.
Although the jobless rate rose, the number of employed grew faster than expected, especially in British Columbia where the jobless rate fell to 6.2%, down from 7% in March and 7.8% in April a year ago.
Stats Canada analyst Jason Gilmore says 20,000 jobs were added last month, which is gain on top of February’s gains.
“The monthly gains are fairly widespread,” he said. “We see increases in manufacturing employment, natural resources, agriculture, a little bit of an increase in educational services.”
The S&P/TSX composite index edged down 5 points to 11,728 with gains in Industrials, IT and Consumer Staples. Materials were hit hardest dropping 1.46% by 1:30pm.
Financial companies in the S&P/TSX picked up steam as former Greece Finance Minister Evangelos Venizelos attempted to form a government that will ensure that country remains in the euro area.
Global stocks have dropped through the week amid the political impasse as doubts grew over Greece’s ability to deal with its debt crisis.
The S&P/TSX Diversified Metals and Mining index rose as copper advanced for the first time in three days after the news from Greece eased concerns that the country will default on loans, boosting the outlook for global economic growth and commodity demand.
Inmet Mining, which operates three mines in Finland, Spain and Turkey, led the materials charge up 1.23% on 251,000 shares traded. The company has offered $1 billion in senior notes to help fund its share of costs for its Cobre Panama copper project. Although costs are up to $6.18 billion from $4.3 billion, Moody’s assigned the company a B+ corporate credit rating and stable outlook.
“The stable outlook reflects our view that contemporary base metals prices should support the company’s credit measures, which are strong for the rating, with funds from operations generation reinforcing Inmet’s liquidity position in a period of extraordinarily large growth capital expenditures.”
The Canadian dollar was up marginally to just over $1 (US) after Stats Canada’s jobs report. The strong employment showing suggests that the Bank of Canada may move sooner than previously expected to hike interest rates.
The loonie had earlier in the week traded lower as traders shunned risk and sought the safety of the U.S. dollar and treasuries.
The TSX Venture Exchange lost 8 points to 1,347, which along with the drop in gold, oil, copper and corn suggests that bets on risk are still largely off the table.
The oil price will stabilise at $100 or below in the coming months as OPEC countries look to maintain a price bracket, Tim Guinness, founder of the energy specialist boutique Guinness Asset Management, told a press release on Thursday.
‘OPEC have a strategic objective to keep oil above $80 per barrel and to supply enough that oil will not go above $100 per barrel,’ said the Citywire Eurostars A-rated Guinness, who manages the €250 million Guinness Global Energy fund, during a press on conference on Thursday.
‘We have been clearer on the oil price today than we have been for a while. This is on the assumption that Israel is not going to bomb Iran or we see an absolute break down in the Chinese economy,’ he said, adding that these were unlikely ‘grey swan’ events.
Gold’s ongoing swan dive arrived at a four month low Friday, as investors continue to seek the refuge of the greenback.
Investors liquidated gold positions to cover losses reaped in other markets, analysts said, as a rise in risk aversion sparked selling across higher risk assets.
Spot gold slid almost $11 to $1,584.60 an ounce, its weakest since Jan. 3, “after support gave way at $1,579, and was down 0.8 percent at $1,581.40 an ounce at 1346 GMT,” said the Financial Post.
“The markets are not happy at all,” Afshin Nabavi, head of trading at MKS Finance, told FP. “(Gold) still feels a bit top heavy. With this move down, physical demand is not all that great. It feels like it may test the lower side around 1550 first, before bouncing back up again.”
Top Gainers in TSX
Top Gainers in TSX Venture
Grenville Gold Corp. / Formerly as Grenville Gold Corporation – Dec 13, 2010 GVG:TSX VENTURE 0.05 (35.71%)
Burnstone Ventures Inc . / Formerly as Pure Diamonds Exploration Inc. – Aug 12, 2009BVE:TSX VENTURE 0.04 (33.33%)
Abington Ventures ABL:TSX VENTURE 0.13 (27.08%)
Tigray Resources Inc. TIG:TSX VENTURE 0.09 (25.00%)
AQM Copper Inc. / Formerly as Apoquindo Minerals Incorporated. – Jun 14, 2010AQM:TSX VENTURE 0.05 (23.68%)
Top Losers in TSX
Osisko Mining Corp. OSK:TSX 0.94 (11.06%)
Wits Gold Limited WGR:TSX 0.39 (8.86%)
Pilot Gold Inc PLG:TSX 0.11 (8.80%)
Alacer Gold Corp. / Formerly as Anatolia Minerals Development Limited – Jan 31, 2011ASR:TSX 0.59 (8.45%)
Macarthur Minerals Limited MMS:TSX 0.05 (8.33%)
Top Losers in TSX Venture
Anconia Resources Corp. / Formerly as Citadel Gold Mines Inc. – June 28, 2011 ARA:TSX VENTURE 0.09 (45.00%)
Full Metal Zinc Ltd. FZ:TSX VENTURE 0.03 (23.81%)
Gentor Resources Inc GNT:TSX VENTURE 0.07 (23.33%)
Salmon River Resources Ltd. SAL:TSX VENTURE 0.07 (23.21%)
Garibaldi Resources Corporation GGI:TSX VENTURE 0.03 (21.43%)