Canadian Stocks Are Up As Metal Prices Surge -- Canadian Commentary

(RTTNews) - The Canadian stock market is faring better than others Friday morning, following the release of the disappointing U.S. employment report for May. The weak report has investors doubting that the Federal Reserve will be able to raise interest rates at its meeting later this month. The opinion has sparked a rally in mining and gold stocks this morning, as precious metal prices head higher. The Canadian market is off its early highs, but remains in positive territory.

Markets in the United States are losing ground in early trade Friday, after the release of the weaker than expected May employment report.

Partly reflecting the impact of a recent strike by Verizon (VZ) workers, the Labor Department released a report on Friday showing much weaker than expected U.S. job growth in the month of May. The Labor Department said non-farm payroll employment edged up by just 38,000 jobs in May compared to economist estimates for an increase of about 158,000 jobs.

The report said the unemployment rate still fell to 4.7 percent in May from 5.0 percent in April, although the decrease came as people left the labor force. The unemployment rate had been expected to dip to 4.9 percent.

Markets in Europe were nearly flat ahead of the U.S. employment report and have been heading steadily lower since the report was released, now trading solidly in negative territory.

The benchmark S&P/TSX Composite Index is up 5.67 points or 0.04 percent at 14,142.66.

On Thursday, the index closed up 73.45 points or 0.52 percent, at 14,136.99. The index scaled an intraday high of 14,147.63 and a low of 14,017.05.

The Gold Index is surging 8.08 percent. Gold prices have turned sharply higher after the disappointing U.S. jobs report. The weak report has investors of the opinion that the Federal Reserve will be unable to raise interest rates later this month.

Barrick Gold (ABX.TO) is rising 9.49 percent and Eldorado Gold (ELD.TO) is gaining 7.49 percent. Kinross Gold (K.TO) is advancing 9.84 percent and Goldcorp (G.TO) is adding 5.98 percent. Yamana Gold (YRI.TO) is climbing 7.75 percent and Royal Gold (RGL.TO) is increasing 5.76 percent. B2Gold (BTO.TO) is soaring 10.13 percent and IAMGOLD (IMG.TO) is up 9.62 percent. The Capped Materials Index is also up 5.36 percent. Franco-Nevada (FNV.TO) is gaining 7.44 percent and Agnico Eagle Mines (AEM.TO) is higher by 8.22 percent. Silver Wheaton (SLW.TO) is advancing 6.06 percent.

The Diversified Metal and Mining Index is advancing 4.36 percent. Teck Resources (TCK-B.TO) is gaining 6.20 percent and First Quantum Minerals (FM.TO) is rising 5.12 percent. HudBay Minerals (HBM.TO) is increasing 3.95 percent and Lundin Mining (LUN.TO) is climbing 3.10 percent. Sherritt International (S.TO) is up 4.11 percent and Capstone Mining (CS.TO) is adding 7.81 percent.

The Capped Telecommunication Services Index is up 0.17 percent. Rogers Communication (RCI-B.TO) is rising 0.46 percent and TELUS (T.TO) is gaining 0.11 percent. BCE (BCE.TO) is also adding 0.25 percent.

The Capped Healthcare Index is losing 1.42 percent. Concordia Healthcare (CXR.TO) is declining 3.07 percent and Extendicare (EXE.TO) is falling 1.96 percent.

Valeant Pharmaceuticals International (VRX.TO) is decreasing 3.63 percent. The company has received a notice of default from the trustee under two of its senior note indentures as a result of the delay in filing Form 10-Q for the period ended March 31, 2016.

The Capped Information Technology Index is falling 1.29 percent. Sierra Wireless (SW.TO) is losing 2.89 percent and Constellation Software (CSU.TO) is down 2.17 percent. BlackBerry (BB.TO) is weakening by 2.40 percent and Descartes Systems Group (DSG.TO) is lower by 0.81 percent. Avigilon (AVO.TO) is also surrendering 0.94 percent.

The heavyweight Financial Index is decreasing 1.05 percent. Canadian Imperial Bank of Commerce (CM.TO) is falling 0.71 percent and Royal Bank of Canada (RY.TO) is losing 1.03 percent. National Bank of Canada (NA.TO) is dipping 0.23 percent and Toronto-Dominion (TD.TO) is down 0.96 percent. Bank of Nova Scotia (BNS.TO) is forfeiting 0.84 percent and Bank of Montreal (BMO.TO) is lower by 0.58 percent.

The Energy Index is down 0.70 percent. Crude oil prices have slipped below $49 a barrel after yesterday's OPEC meeting failed to produce an agreement to cap output. Iran refused to cooperate with requests to limit production as it attempts to make up for years of harsh sanctions.

Crescent Point Energy (CPG.TO) is losing 0.18 percent and Cenovus Energy (CVE.TO) is falling 0.70 percent. Canadian Natural Resources (CNQ.TO) is weakening 1.32 percent and Encana (ECA.TO) is lower by 1.80 percent. Imperial Oil (IMO.TO) is dipping 0.36 percent and Suncor Energy (SU.TO) is declining 0.86 percent. Enbridge (ENB.TO) is slipping 0.36 percent and Husky Energy (HSE.TO) is down 0.87 percent.

The Capped Industrials Index is losing 0.56 percent. Canadian Pacific Railway (CP.TO) is decreasing 0.63 percent and Canadian National Railway (CNR.TO) is down 0.29 percent. Air Canada (AC.TO) is declining 1.34 percent and AutoCanada (ACQ.TO) is falling 0.37 percent.

On the economic front, Statistics Canada reported this morning that the Canadian trade deficit narrowed to C$2.9 billion in April. Economists had been expecting a trade deficit of C$2.5 billion. Last month's trade deficit was revised to C$3.18 billion, from the initial reading of C$3.4billion.

A separate report from Statistics Canada showed that Canadian labor productivity increased by 0.4 percent in the first quarter. The result was in line with expectations.

The Chinese private sector activity expanded at a slower pace in May as the service sector growth slowed from April and manufacturing output declined, survey data from Markit showed Friday. The Caixin composite output index came in at 50.5 in May, down from April's 50.8, signaling the weakest pace of expansion in the current three-month sequence of growth.

The services sector in China continued to expand in May, albeit at a slower pace, the latest survey from Caixin revealed on Friday with a services PMI score of 51.2. That's down from 51.8 in April.

The euro area private sector activity expanded more than initially estimated in May but growth remained subdued, final data from Markit showed Friday. The final composite output index rose to 53.1 in May from 53.0 in April. According to flash estimate, the score fell to 52.9 in May.

Eurozone retail sales remained flat unexpectedly in April, data from Eurostat showed Friday. Retail sales remained unchanged in April from March, when it declined by revised 0.6 percent. Economists had expected a 0.4 percent rise for April.

The U.K. service sector growth strengthened more-than-expected in May but the pace of expansion was one of the weakest seen over the past three years, survey data from Markit Economics showed Friday. The Markit/Chartered Institute of Procurement & Supply Services Purchasing Managers' Index climbed to 53.5 from a 38-month low of 52.3 in April. The score was forecast to rise marginally to 52.5.

With imports rising more than exports, the Commerce Department released a report on Friday showing that the U.S. trade deficit widened in the month of April.

The report said the trade deficit widened to $37.4 billion in April from a revised $35.5 billion in March. The deficit had been expected to widen to $41.0 billion from the $40.4 billion originally reported for the previous month.

In commodities, crude oil futures for July delivery are down 0.36 or 0.73 percent at $48.81 a barrel.

Natural gas for July is down 0.004 or 0.17 percent at $2.401 per million btu.

Gold futures for August are up $31.40 or 2.59 percent at $1,244.00 an ounce.

Silver for July is up $0.38 or 2.37 percent at $16.405 an ounce.