Mixed week for global equity markets
Global stock markets were mixed this week, with North American markets failing to keep up with their European counterparts.
Canadian share prices fell in a holiday-shortened trading week as the key financials, energy and material sectors declined. Oil fell to fresh multi-month lows on U.S. dollar strength, an increase in U.S. production and support for a nuclear deal with Iran that could lift sanctions on the country's oil exports.
Canada saw some encouraging economic data. The country in June experienced its biggest monthly increase in exports since 2006. Increased exports to the U.S. were largely responsible for the improved performance. Meanwhile, a purchasing managers survey showed manufacturing continued to expand. The economy added 6,600 jobs in June-an improvement over a loss of jobs during the previous month-and the unemployment rate was steady at 6.8%.
U.S. stocks were weighed down by a mixed bag of earnings reports, falling oil prices and concerns about the future of interest rates as the employment data strengthened the case for a Federal Reserve rate hike. Job creation remained steady as non-farm payrolls increased by 215,000 last month and the unemployment rate remained at a seven-year low of 5.3%. Earnings in the media sector were particularly damaging to share prices as investors interpreted disappointing results as a signal of an increasing struggle by traditional media companies to cope with a shift away from traditional television services.
Other U.S. economic news was mixed. Spending by consumers, which accounts for about two-thirds of economic activity, was weaker than anticipated In June. Although spending rose slightly, it was the smallest increase since February. Growth in the U.S. manufacturing sector in July also failed to meet expectations. The country's trade balance grew more than expected in June as a strengthening currency hindered exports.
Most European markets gained, supported by encouraging earnings reports, easing worries about Greece and healthy manufacturing data. Major Asian markets outside of China were little changed as volatility in China abated and the Shanghai Composite index advanced. However, factory activity in China contracted more than originally estimated in July.