Market Report - June 5, 2015

 Stock markets around the world declined this week amid volatility created by US and global economic data, interest rate concerns and geopolitical developments.

Canada’s S&P/TSX
Composite index fell despite largely favourable secondquarter earnings reports, dividend increases and share buy -backs from Canadian banks.

The energy and materials sectors lost ground on wavering commodities prices.

Canada’s gross domestic product (GDP) shrank by 0.6% y-o-y in the first quarter of the year, a sharp decline from 2.4% in the final quarter of 2014. The lower-than expected number was the
result of falling oil prices and a harsh winter.

Earlier in the week, the Bank of Canada kept its key interest rate at 0.75%, saying it expects that a return to more robust US economic growth in the second quarter will help
Canada’s economy. The US reported that its GDP contracted by 0.7% y-o-y in the first quarter, down from an earlier estimate of 0.2% growth.

The revision was expected as difficult winter weather and a strong dollar hurt the economy.

Economic concerns contributed to the decline of Wall St.’s S&P 500 in a holiday shortened week. Some investors questioned the potential for future growth and those who saw hope for the econ -
omy turned their attention to a possible interest rate increase by the Federal Reserve.

However, the Nasdaq Composite index hit a fresh record high, fueled by rebounding technology stocks and big-ticket merger-and acquisition activity.

Most European markets lost ground as they wrestled with uncertainty over Greece’s ability to make upcoming debt payments and economic data.

Asian markets were mostly lower as a 6.5% plunge in Chinese stocks on Thursday pressured the region. However, China’s major stock market was still up more than 40% for the
year. Japan’s market bucked the trend as an 11-day winning streak took it to a 15- year high. A declining yen, at its lowest level against the US dollar since late 2002, is supporting record profits for
many exporters.

• The Canadian currency lost more ground as the US dollar strengthened and the Bank of Canada held the line on rates.
• Canada’s currentaccount deficit was the second largest on record in the first quarter as exports were hurt by lower oil prices. A deficit indicates that a country imports more than it exports.
• Durable goods orders in the US declined in April over March and were down y-o-y.

However, much of the drop was concentrated in the air craft industry, suggesting strength in other areas.

• US newly built home sales and pending home sales rebounded in April and house prices rose in March, more signs of a pickup in this important sector of the economy.
• China cut import duties on many consumer products in half to spur consumer spending and slowing eco nomic growth.
• Monthly jobs data.
• Purchasing managers indexes.
• Trade balance.
• Monthly jobs data.
• Purchasing managers indexes.
• Trade balance.
• Factory orders.
• Federal Reserve Beige Book report.
• Consumer sentiment.
• Personal income and expenditures.
• Construction spending.

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