Toronto stock market set to open lower; questions about Chinese economy remain
TORONTO - The Toronto Stock market looked set to open lower after China reported that its export growth accelerated in May, but imports dipped for the world's second-biggest economy.
The Canadian dollar was up 0.01 of a cent to 91.5 cents US as traders look for reassurances that China's economy is still strong.
U.S. futures were negative with the Dow Jones industrial futures down 13 points to 16,924.28, the Nasdaq futures declined 2.7 points to 3,794.57, while the S&P futures were down two points to 1,949.44.
On Sunday, China released data that showed exports rose seven per cent in dollar terms, up from a 0.9 per cent increase in April and rather large slump in February and March. Imports declined 1.6 per cent in May after inching up 0.8 per cent in April. Private sector analysts say the Chinese economy will likely slow down as the impact of mini-stimulus efforts fade.
China releases the latest inflation readings on Monday and will release its industrial production and retail sales numbers later in the week.
Also in Asia, the Japanese government reported that its economy grew an annualized 6.7 per cent in January-March thanks to strong private investment, up from an earlier estimate of 5.9 per cent growth. The revised data shows the world's No. 3 economy in better shape to withstand the drop in consumer demand that followed a three percentage point hike in sales tax on April 1.
On the corporate front, U.S. meat producer Tyson Foods Inc. has won a bidding war for Hillshire Brands, the maker of Jimmy Dean sausages and Ball Park hot dogs, with a $63 per share offer. Tyson values the deal at $8.55 billion.
Both Tyson and Pilgrim's Pride had been bidding of Hillshire Brands. The deal is contingent on Hillshire Brands terminating its agreement to buy Pinnacle Foods, which makes Birds Eye frozen vegetables and Wish-Bone salad dressings.
In Canada, credit monitoring agency Equifax says demand for credit has increased for four consecutive quarters in Western Canada, while demand in the Eastern provinces continues to slow down. Equifax Canada says its first-quarter statistics show that consumers' overall debt load, including mortgages, remains high around $1.4 trillion.
On Friday, Statistics Canada announced the country added 25,800 new jobs in May, which, besides being all part-time, still didn't in numerical terms make up for the 29,000 lost in April.
In the United States, the jobs numbers went from strength to strength, adding 217,000 in May on top of 282,000 created in April.
Over the past 12 months, Canada's economy has added 86,000 new jobs, for a 0.5 per cent increase. The U.S. has added 2.4 million, for a 1.7 per cent increase.
On the commodity markets, the July crude contract on the New York Mercantile Exchange gained 79 cents to US$103.45 a barrel.
August bullion increased $3.40 to US$1,256 an ounce and July copper was down two cents to US$3.02 a pound.