Canadian Stocks Little Changed on Thursday
The S&P/TSX traded around the flatline on Thursday, after snapping a four-day winning streak the day before with heavyweight energy and materials stocks were among the worst performers dragged down by lower commodities prices. Adding to the bearish tone were the last minutes from an April Federal Reserve meeting, which showed that some policymakers are already comfortable discussing a tapering plan if the US economy continues to pick up strongly and inflationary pressures persist. On the domestic front, latest data showed prices of new homes rose 1.9 % from the previous month in April.
Baltic Exchange Dry Index Up for 2nd Day
The Baltic Dry Index rose 0.8% to 2,824 on Thursday, extending gains for a second straight session, as the panamax index which tracks cargoes of about 60,000 to 70,000 tonnes of coal and iron ore, went up 0.5% to 2,870. In addition, the capesize index, which tracks iron ore and coal cargos of 150,000-tonnes, rose 29 points to 3,814, snapping a seven-session long streak of declines. Among smaller vessels, the supramax index added 23 points to 2,374.
Copper Falls for 2nd Day
Copper futures fell for the second session on Thursday, trading below $4.6 per pound, after China said it will strengthen its management of commodity supply and demand to curb any “unreasonable” increases in prices. On the supply side, miner Glencore will restart operations at the currently idled Mutanda copper mine in the Democratic Republic of Congo in 2022 while in top producer Chile a possible strike at the world’s largest Chile’s Escondida mine threatens output. In spite of the price adjustment from a record high of $4.9 per pound reached on May 11th the copper cost is set to remain elevated given how crucial the metal is in the transition to a carbon-free world and as supply is constrained due to lack of investment by large miners. Meantime, the world’s top producer Chile passed a measure that would introduce progressive taxes on copper sales starting in 2024 and with the highest bracket set at 75%, pending the approval by the senate and the government.
European Shares Recover in Afternoon Trading
European stocks rebounded Thursday afternoon, with tech shares leading the gains following reports that Europe’s No 2 chipmaker STMicroelectronics is mulling an offer to buy its rival Nordic Semiconductor. In other corporate news, Deutsche Telekom raised its medium-term core profit outlook; while French conglomerate Bouygues revised up the full-year guidance for its telecoms division and reported a smaller than expected first-quarter core loss. Meanwhile, economic recovery hopes were supported by news that EU countries agreed to ease COVID-19 travel restrictions on non-EU visitors, while EU Commission chief Ursula von der Leyen said the EU vaccination campaign was catching up with that of the US. Elsewhere, economic data showed German producer prices rose in April by the most in nearly a decade, adding to signs of growing inflationary pressure in Europe’s largest economy. At the same time, the US Fed minutes suggested policymakers could soon talk about starting to scale back stimulus.