Markets Fade to Begin June



Stocks throughout North America stubbed their collective toes to start off June, with energy and health stocks weighing most on Canadian markets Monday.

The S&P/TSX Composite Index backtracked 152.43 points to close Monday at 22,116.69.

The Canadian dollar let go of 0.08 cents at 73.35 cents U.S.

Energy took the biggest battering, with Baytex Energy shedding 33 cents, or 6.6%, to $4.68, while Tamarack Valley Energy dumped 22 cents, or 5.7%, to $3.62.

Health-care units took some lumps, too, as Bausch Health Companies dropped 33 cents, or 3.7%, to $8.62, while Chartwell Residential Retirement lost 12 cents, or 1%, to $12.35.

In financials, Sprott Inc. slipped $1.24, or 2%, $60.03, while TMX Corp. swooned 51 cents, or 1.4%, to $36.07.

Real-estate led gainers, with First Capital REIT up 48 cents, or 3.3%, to $14.85, while units of FirstService Corporation grabbed $3.86. or 1.9%, to $203.96.

In utilities, Northland Power gained 39 cents, or 1.7%, to $23.69, while Innergex Renewable captured 14 cents, or 1.4%, to $9.90.

Gold stocks also made headway with Barrick Gold jumping 50 cents, or 2.2%, to $23.75, while Centerra Gold picked up 19 cents, or 2%, to $9.56.

The main event for the week would be the BoC’s rate decision on Wednesday. The central bank is expected to trim interest rates to 4.75%, according to three-quarters of economists in a Reuters poll that showed three further cuts this year, with the last one hanging on a knife’s edge.

Elsewhere on the economic ledger, the Markit Canada Manufacturing PMI for May decreased to 49.30 points in May from 49.40 points in April. Manufacturing PMI in Canada averaged 52.42 points from 2011 until 2024, reaching an all time high of 58.90 points in March of 2022 and a record low of 33 points in April of 2020.

ON BAYSTREET

The TSX Venture Exchange skidded 4.95 points to 605.92.

The 12 subgroups were evenly split between gainers and losers, with energy sinking 4.3%, health-care sliding 1.4%, and financials off 0.4%.

The half-dozen gainers were led by real-estate, up 0.7%, utilities, up 0.5%, and gold up 0.5%.

ON WALLSTREET

The Dow Jones Industrial Average fell Monday after weak U.S. manufacturing data raised concerns about the strength of the economy.
Banks, industrials and other shares dependent on economic growth led the pullback.

The 30-stock index stumbled 115.29 points to end Monday at 38,571.03.

The S&P 500 poked ahead 5.89 points to 5,283.40.

The NASDAQ remained positive 93.65 points to 16,828.67.

Wall Street is coming off a strong month, with all three major averages notching their sixth positive month in seven. The Nasdaq rose 6.9% in May, its best month since November 2023.

However, the rally seemed to lose steam near the end of the month. The three averages all closed May more than 1% below their record highs, even with the Dow adding more than 500 points on Friday. The NASDAQ fell 1.1% last week as chip stocks, including Nvidia, stumbled.

Cyclical stocks whose fortunes are closely tied to economic growth such as energy, industrial and materials companies led the decline.

Earlier, the U.S. manufacturing sector showed signs of slowing, with the ISM manufacturing index measuring 48.7 in May, sending Treasury yields and the dollar lower. A reading below 50 is an indication of a contraction.

Nvidia rose nearly 5% after announcing a new suite of artificial intelligence chips, a sign it is prepared to fight to stay ahead in the highly competitive space. The chipmaker said it will upgrade its AI chip architecture on an annual basis.

The first week of June is brimming with further economic updates. Investors also await private payroll data on Thursday from ADP followed by a key jobs report on Friday.

Prices for the 10-year Treasury gained a bit of ground, lowering yields to 4.40% from Friday’s 4.50%. Treasury prices and yields move in opposite directions.

Oil prices shed $2.99 to $74.00 U.S. a barrel.

Gold prices resurfaced $21.00 to $2,366.90.



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