Stocks Open Below Breakeven

EXFO, CN at Centre Stage

Equities in Canada’s biggest centre opened slightly lower on Thursday as housing starts rose more than expected in June, bolstering hopes of a post-pandemic economic rebound.

The S&P/TSX Composite Index began trading Thursday down 12.13 points to 15,617.06.

The Canadian dollar eked ahead 0.07 cents at 74.04 cents U.S.

Federal Finance Minister Bill Morneau said Wednesday Canada's budget deficit is expected to hit $343.2 billion, the largest shortfall since the Second World War, due to record emergency aid spending in response to the COVID-19 pandemic.

Reports emerged Wednesday that France's Alstom SA will propose concessions to European regulators on Thursday, including the sale of a French rail factory, in an effort to win early antitrust approval for its planned purchase of Bombardier’s transportation unit.

Bombardier shares backpedaled half a cent, or 1.2%, to 43 cents.

BMO raised the target price on EXFO Inc. to $3.75 from $3.50. EXFO shares took on 51 cents, or 11.7%, to $4.86.

JP Morgan raised the target price on Canadian National Railway to $123.00 from $115.00. CN shares reversed 57 cents to $120.74.

In the economic docket, Canada Mortgage and Housing Corporation reported seasonally-adjusted housing starts in this country amounted to 211,681 in June, compared with a revised 195,453 units in May.

ON BAYSTREET

The TSX Venture Exchange kept rolling, gaining 8.2 points, or 1.2%, to 673.

The 12 TSX subgroups were evenly divided in Thursday’s first hour, as gold shone brighter 0.8%, while materials and energy issues each climbed 0.6%.

The half-dozen laggards were weighed most by financials, down 0.9%, consumer discretionary stocks, off 0.8%, and health-care, fading 0.7%.

ON WALLSTREET

The NASDAQ Composite hit an all-time high on Thursday as major tech shares outperformed once again amid rising coronavirus cases.

The Dow Jones Industrials sank 13 points to 25,956. Walgreens was the biggest decliner in the Dow, dropping about 7% on weaker-than-expected earnings for the previous quarter. Walgreens also suspended a share repurchase program.

The S&P 500 inched up five points to 3,168.50, and posted an all-time closing high.

The tech-heavy NASDAQ zoomed 68.25 points to 10,530.50, also notching a record high.

Since last week’s close, the S&P 500 gained 1.3%, the Dow improved 0.9% and NASDAQ strengthened 2.8%. The NASDAQ is up 29.7% over the last three months.

Netflix gathered 1.2%, and Microsoft was up 1.1%. Apple advanced 0.5%. Facebook, Amazon and Alphabet also rose.

These stocks have outperformed this week as investors grow concerned the recent global coronavirus spikes could prolong the current economic downturn and force people to stay home for longer.

Amazon is up more than 7% week to date and Alphabet has gained over 3% in that time period. Microsoft, Facebook and Apple are all up more than 4% for the week.

The U.S. Labor Department said 1.314 million Americans filed for unemployment benefits last week. Economists polled by Dow Jones expected a print of 1.39 million. Continuing claims fell by 698,000 to 18.06 million.

More than three million coronavirus cases have been confirmed in the U.S. alone, according to Johns Hopkins University. Globally, over 12 million cases have been confirmed.

Prices for the 10-Year Treasury were up, dropping yields to 0.63% from Wednesday’s 0.66%. Treasury prices and yields move in opposite directions.

Oil prices fell 37 cents to $40.53 U.S. a barrel.

Gold prices added $1.50 to $1,822.10 U.S. an ounce.