What happened?    

  • The news last week was a mixture of both good and bad, with a slight advantage toward negative locally, but more positive in the U.S.  Consequently, the performance of North American equities was also mixed, with the TSX declining and U.S. indices flat overall.
    • The Bank of Canada (BoC) Chair Stephen Poloz suggested to a Senate committee that a rate hike could be possible if some of the impediments to economic growth are removed, like trade tensions between the Canada and U.S., and China.
    • Canadian Gross Domestic Product (GDP) shrank in February.
    • The U.S. Federal Reserve have both indicated that the next interest rate adjustment will not be a reduction, as some investors have hoped.  The patient approach is aligned with their earlier statements and matches the desire to slowly normalize (move to more traditional and familiar levels) rates, not contribute to slowing economic growth and keep inflation low.
    • In the U.S. 263,000 jobs were added in April and unemployment fell to its lowest level in nearly five decades.   Manufacturing productivity, consumer confidence and spending are rising, as inflation holds low and steady.  
    • The uptick at the week’s end in equities relied upon the continued strong profits as first quarter reporting neared its completion.  
      • This short summary of last week’s mixed news and results demonstrate the varied influences and effects that can result.

What’s ahead for this week?

  • In Canada, several housing indicators will be released with new housing prices and building permits for March, and April’s housing starts.  Additionally, the employment report for April will be announced, during the week following a surprisingly positive U.S. jobs report.
  • In the U.S., inflation numbers will be released by the Consumer Price Index (CPI) and Producer Price Index (PPI) for April, along with the trade balance for March.