Morning Minutes

Employment Numbers Suggest Stagflation in Canada




Friday finds US index futures holding steady between a decline of 0.2% for Dow Futures and a 0.2% gain for NASDAQ Futures as investors digest yesterday’s US index gains of 0.5% to 1.0%. Over in Europe, the Dax is down 0.2% and the FTSE is down 0.6%. Commodities are having a decent day so far with WTI Crude Oil up 0.3% and Copper up 0.6%.

Today’s Canadian employment reports suggests Stagflation (low economic growth and high inflation) may be taking hold. Canadian employment dropped by 17K in May, far below the 23K increase the market had been expecting, a significant slowdown. Meanwhile average hourly wages remained above 5.0% (5.1% vs previous 5.2%). Wage inflation remaining stubbornly high and sticky supports the Bank of Canada’s surprise decision to raise interest rates earlier this week.  

In corporate news, General Motors and Tesla Motors are up 4.3% and 6.2% respectively in premarket trading after the two automakers announced a partnership designed to move toward standardized charging for electric vehicles. Under the deal GM drivers will be able to use Tesla charging stations and GM will use Tesla charging technology in its vehicles starting two years from now.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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