Flat Start to Friday Trading

Bombardier in Focus


Markets in Toronto opened slightly higher on Friday as the domestic jobless rate fell in June, signaling a recovery from the economic fallout caused by coronavirus outbreak.

The S&P/TSX Composite Index poked ahead 5.56 points Friday at 15,574.20.

The Canadian dollar skidded 0.03 cents at 73.58 cents U.S.

European Union antitrust regulators have set a new deadline of July 31 to rule on Alstom's bid for Bombardier's transport business after the French TGV high-speed train maker offered to sell assets to address competition concerns.

Bombardier had yet to move from Thursday’s perch of 42.5 cents, less than an hour into the session.

BMO raised the target price on Aritzia to $24.00 from $21.00. Aritzia shares gained 34 cents, or 1.7%, to $20.30.

BMO also raised the target price on Endeavour Silver to $3.50 from $2.80. Endeavour shares tailed off 63 cents, or 1.8%, to $33.81.

In the economic docket, Statistics Canada reported the economy gained back 953,000 jobs in June, for a 3.5% increase, with gains split between full-time work (488,000 or 3.5%) and part-time work (465,000 or 17.9%).

Even with consecutive increases in May and June, employment in June was still 1.8 million (or 9.2%) lower than in February, before the outbreak hit this country.

A survey of economists says the economic recovery underway in Canada will be stronger in the near-term than expected a few months ago. Economists said a resurgence in coronavirus infections and high unemployment were the two biggest risks.

Also, Canada is preparing to dial back emergency income support for people laid off due to COVID-19 in favour of more traditional unemployment benefits and will shift resources to a wage subsidy program that encourages employers to rehire staff.

ON BAYSTREET

The TSX Venture Exchange tacked on 5.5 points to 677.46.

Seven of the 12 TSX subgroups were higher in the first hour, with energy surging 1.6%, health-care soaring 0.9%, and financials richer by 0.6%.

The five laggards were weighed most by information technology, down 1.2%, gold, off 0.9%, and materials, sliding 0.5%.

ON WALLSTREET

Stocks fell in choppy trading Friday as traders digested news about a potential coronavirus treatment as well as another record spike in virus cases.

The Dow Jones Industrials nosed up 1.28 points to 25,707.37.

The S&P 500 ducked 1.96 points to 3,150.09

The tech-heavy NASDAQ docked 45.12 points to 10,503.28.

Gilead Sciences said its coronavirus treatment candidate, remdesivir, "was associated with an improvement in clinical recovery and a 62% reduction in the risk of mortality compared with standard of care." The news sent Gilead shares up more than 1%.

BioNTech’s CEO also told The Wall Street Journal the company’s coronavirus vaccine candidate could be ready for approval by December. The company’s U.S.-listed shares rose 4%.

The news led to a rotation out of major tech stocks and into companies that would benefit from the economy reopening. Facebook, Amazon, Alphabet, Apple and Microsoft were all lower. Delta Air Lines, United and American all gained at least 1%. Bank shares such as JPMorgan Chase gathered 2.1%, and Citigroup rose 1.8%.

Gilead and BioNTech’s comments came after the U.S. reported more than 63,000 additional coronavirus cases, a record. The country’s seven-day average now stands at more than 53,000 cases.

Investors have flocked into mega-cap tech names such as Amazon, Microsoft, Netflix and Apple amid fears this latest resurgence in coronavirus could lead to people staying home for longer. All four of these stocks are trading at, or near all-time highs. They are also up at least 3.9% each week to date.

Prices for the 10-Year Treasury rose, dropping yields to 0.60% from Thursday’s 0.61%. Treasury prices and yields move in opposite directions.

Oil prices regrouped 14 cents to $39.76 U.S. a barrel.

Gold prices progressed $3.70 to $1,807.50 U.S. an ounce.