News Column

Toronto stock market heads for positive open amid strong Chinese economic data

June 2, 2014

Malcolm Morrison, The Canadian Press

TORONTO - The Toronto stock market was in for a positive start to trading Monday with support coming from the mining sector as copper prices advanced in the wake of a strong read on Chinese manufacturing.

The Canadian dollar was lower, down 0.19 of a cent to 92.04 cents US two days before the Bank of Canada delivers its next interest rate announcement.

U.S. futures were higher ahead of a heavy slate of economic data, capped at the end of the week by the government's non-farm payrolls report.

The Dow Jones industrial futures were up 13 points to 16,717, the Nasdaq rose four points to 3,739.5 and the S&P 500 futures added 0.4 of a point to 1,921.9.

There was positive data from the world‘s second-biggest economy as the China Federation of Logistics and Purchasing said that its monthly manufacturing index rose to 50.8 points in May, up from April’s reading of 50.4 and was the highest level this year. Any reading above 50 indicates expansion.

The Chinese data pushed the July copper contract up four cents to US$3.16 a pound.

Elsewhere on the commodity markets, July crude in New York was up a dime to US$102.81 a barrel.

July bullion headed 80 cents higher to US$1,246.80 after losing 3.5 per cent last week with markets feeling more comfortable about the Ukraine crisis and more concerned about deflation rather than inflation, particularly in Europe.

It is widely expected that European Central Bank president Mario Draghi will announce measures on Thursday aimed at raising inflation from very low levels and encouraging a lacklustre economic recovery.

On Monday, traders will take in the latest reading on the health of the American manufacturing sector. Economists expect the Institute for Supply Management's index for May to come in at 55.5, up from 54.9 in April.

Economists also forecast another month of strong job gains in the U.S. They expect the economy cranked out about 219,000 jobs following a much stronger expected 288,000 gain in April.

Canadian job figures for May also come out Friday and economists expect the economy created 21,000 jobs after losing 29,000 the previous month.

Statistics Canada will also release the merchandise trade balance for April on Wednesday. Economists expect it to show a $100 million surplus.

On the corporate front, trucking and delivery company TransForce Inc. says it has a US$310-million deal to buy Minnesota-based Transport America, Inc., which offers transportation services across the United States. Transforce (TSX:TFI) says the acquisition is expected to generate annual revenues of about US$350 million for the Quebec company.

There remains a trickle of first-quarter earnings reports coming out this week.

Investors will look to see how Hudson's Bay Co. (TSX:HBC) fared during the quarter on Tuesday and Laurentian Bank posts results on Wednesday.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Canadian Press DataFile

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