Canadian Stocks Are Down Again On Brexit Worries -- Canadian Commentary

(RTTNews) - The Canadian stock market is trading substantially lower Wednesday morning, adding to the losses of the previous session. Continued worries over the fallout from the U.K. vote to leave the European Union has investors fleeing to safe havens. Financial stocks are suffering due to these "Brexit" concerns, while the continued decline in crude oil prices is pressuring energy stocks.

However, the strong performance of gold stocks is helping to limit the market's downside this morning. Gold stocks are benefitting from their safe haven appeal.

Markets in Europe are losing ground for a third consecutive session Wednesday. Brexit worries and concerns over Italy's banking system have sparked risk aversion and fueled demand for safe-haven assets. Sluggish factory orders and construction activity data out of Germany has also dampened investor sentiment.

Markets in the United States are also in negative territory this morning, adding to the losses of the previous session. Lingering concerns about the impact of Britain's decision to leave the European Union continue to weigh on the markets. The so-called Brexit vote has raised global growth worries, leading some traders to move their money into safe havens such as U.S. government bonds, which has pushed the yields on ten-year notes and thirty-year bonds to record lows.

The Federal Reserve is due to release the minutes of its latest monetary policy meeting later in the day. Traders are also looking forward to the release of the U.S. jobs report for June on Friday.

The benchmark S&P/TSX Composite Index is down 78.68 points or 0.55 percent at 14,140.89.

On Tuesday, the index closed down 39.30 points or 0.28 percent, at 14,219.57. The index scaled an intraday high of 14,249.92 and a low of 14,147.20.

The heavyweight Financial Index is decreasing 1.39 percent. Toronto Dominion Bank (TD.TO) is losing 1.79 percent and Canadian Imperial Bank of Commerce (CM.TO) is falling 1.07 percent. Royal Bank of Canada (RY.TO) is lower by 1.14 percent and Bank of Nova Scotia (BNS.TO) is declining 0.93 percent. National Bank of Canada (NA.TO) is weakening 1.40 percent and Bank of Montreal (BMO.TO) is slipping 0.62 percent.

The Diversified Metal and Mining Index is declining 1.36 percent. HudBay Minerals (HBM.TO) is decreasing 2.67 percent and Teck Resources (TCK-B.TO) is down 1.56 percent. Lundin Mining (LUN.TO) is losing 2.53 percent and First Quantum Mineral (FM.TO) is falling 3.08 percent. Capstone Mining (CS.TO) is dropping 1.11 percent.

The Capped Information Technology Index is falling 1.07 percent. Constellation Software (CSU.TO) is lower by 0.79 percent and Sierra Wireless (SW.TO) is declining 0.85 percent. BlackBerry (BB.TO) is decreasing 2.23 percent and Descartes Systems Group (DSG.TO) is slipping 0.65 percent. Avigilon (AVO.TO) is also down 0.47 percent.

The Energy Index is down 0.98 percent. Crude oil prices have slipped further Wednesday morning amid lingering concerns about the fallout from the UK's Brexit. Robust supplies, geopolitical tensions and signs of economic strain in China are also keeping a lid on crude oil prices.

Cenovus Energy (CVE.TO) is losing 1.18 percent and Crescent Point Energy (CPG.TO) is decreasing 0.93 percent. Canadian Natural Resources (CNQ.TO) is declining 0.62 percent and Husky Energy (HSE.TO) is lower by 1.59 percent. Suncor Energy (SU.TO) is weakening by 1.48 percent and Encana (ECA.TO) is falling 2.57 percent. Enbridge (ENB.TO) is surrendering 0.86 percent and Imperial Oil (IMO.TO) is forfeiting 0.97 percent.

The Capped Industrials Index is falling 1.01 percent. Bombardier Inc. (BBD-B.TO) is weakening by 0.52 percent and Air Canada (AC.TO) is surrendering 2.83 percent. Canadian National Railway (CNR.TO) is losing 0.97 percent and Finning International (FTT.TO) is dropping 1.16 percent.

Canadian Pacific Railway (CP.TO) is decreasing 1.94 percent. The company stated that, counter to union leadership's statements that recently announced layoffs at CP were in violation of the law, CP said it has in fact been working closely with Transport Canada, meeting or exceeding all requirements, as well as all applicable requirements of the union's collective agreement.

The Capped Telecommunication Services Index is down 0.10 percent. BCE (BCE.TO) is decreasing 0.45 percent and Manitoba Telecom Services (MBT.TO) is falling 0.18 percent.

The Gold Index is higher by 2.81 percent. Gold prices have continued to rise Wednesday, extending more than two-year highs amid risk aversion and expectations of easy monetary policy.

B2Gold (BTO.TO) is gaining 4.24 percent and Kinross Gold (K.TO) is up 1.09 percent. IAMGOLD (IMG.TO) is increasing 4.16 percent and Yamana Gold (YRI.TO) is higher by 3.24 percent. Royal Gold (RGL.TO) climbing 5.12 percent and Goldcorp (G.TO) is adding 1.50 percent. Eldorado Gold (ELD.TO) is advancing 2.05 percent and Barrick Gold (ABX.TO) is rising 3.71 percent.

Centerra Gold Inc. (CG.TO) said that it agreed to acquire Thompson Creek Metals Company Inc. (TCM.TO) for $1.1 billion. Centerra is sinking 7.16 percent, while Thompson Creek is surging 15.63 percent.

The Capped Materials Index is also up 1.16 percent. Agnico Eagle Mines (AEM.TO) is climbing 1.77 percent and Franco-Nevada (FNV.TO) is advancing 1.27 percent. Silver Wheaton (SLW.TO) is gaining 2.56 percent.

Agrium (AGU.TO) is higher by 0.32 percent. The company announced a binding purchase agreement between its Crop Production Services and Cargill AgHorizons (U.S.) for the acquisition of 18 Ag-retail locations, across the northern U.S. Corn-Belt region.

The Capped Healthcare Index is gaining 0.44 percent. Valeant Pharmaceuticals International (VRX.TO) is rising 4.04 percent.

Torstar Corporation (TS.B.TO) CEO David Holland is reportedly set to step aside. The stock is dropping 4.19 percent.

On the economic front, data from Statistics Canada showed that Canada's merchandise trade deficit came in at C$3.3 billion in May. This was bigger than the $2.68 billion shortfall expected by economists and follows a C$2.94 billion deficit in April.

Canada's exports fell 0.7 percent to C$41.1 billion in May, while imports decreased 0.8 percent to C$44.4 billion.

Germany's factory orders remained unchanged in May, despite an increase in demand from euro area economies. Factory orders stayed flat from April, when they fell by a revised 1.9 percent, the biggest decrease since July 2015, provisional data from Destatis showed Wednesday.

Economists had forecast orders to grow 1 percent after April's initially reported 2 percent decline.

Germany's construction activity expanded at the weakest pace in ten months in June, survey figures from Markit Economics showed Wednesday. The construction Purchasing Managers' Index, or PMI, fell to 50.4 in June from 52.7 in May.

U.K. shop prices declined at a faster pace in June, the British Retail Consortium said Wednesday. Shop prices decreased 2 percent in June from a year ago, which was bigger than May's 1.8 percent decline.

Britons' housing equity injections reached its lowest level since early 2008, the Bank of England said Wednesday. Households injected GBP 4.86 billion in the first quarter, compared to GBP 8.19 billion in the prior quarter. This was the lowest since the first quarter of 2008.

Primarily reflecting a jump in the value of imports, the Commerce Department released a report on Wednesday showing that the U.S. trade deficit widened by more than expected in the month of May. The report said the trade deficit widened to $41.1 billion in May from $37.4 billion in April. Economists had expected the deficit to widen to $40.0 billion.

In commodities, crude oil futures for August delivery are down 0.18 or 0.39 percent at $46.42 a barrel.

Natural gas for August is down 0.023 or 0.83 percent at $2.741 per million btu. Gold futures for August are up $8.70 or 0.64 percent at $1,367.40 an ounce.

Silver for September is up $0.183 or 0.92 percent at $20.09 an ounce.