Update: TSX Virtually Unchanged Thursday as Gains in Materials & Energy Outweighed Losses in the Financial Sector

Update: TSX Virtually Unchanged Thursday as Gains in Materials & Energy Outweighed Losses in the Financial Sector

Canada’s main stock market was marginally higher Thursday in thin trading with U.S. bourses closed for Thanksgiving. The S&P/TSX Composite Index was up 0.7 points or unchanged at 16,074 after losing 3 points on Wednesday. Expect more of the same lethargic tone on Friday, with U.S. markets closing at 1 pm ET.

The materials sector climbed 0.5% while energy was up 0.25%. However, consumer staples and financials offset gainers, with declines of 0.5% and 0.2%, respectively.

In stock news, heavily traded Aurora Cannabis (ACB.TO) rose 5% after buying global greenhouse design firm Larssen. Aurora also noted that CanniMed Therapeutics (CMED.TO) has formed a special committee ahead of an expected formal purchase offer from its rival. CMED gained 6% today. In addition, Aurora has closed a non-brokered private placement for $3.2 million with Hempco Food and Fiber (HEMP.V), which gained 2% Thursday.

In economic news, Canadian retail sales grew only 0.1% in September after a revised 0.1% drop (was -0.3%) in August. The ex-auto retails sales aggregate improved 0.3% following a 0.4% drop (was -0.7%). Sales were fuelled by gasoline stations, where higher prices lifted sales values. Retail sales excluding the gasoline station subsector fell 0.2%. The gain in total sales and the ex-autos sales aggregate fell well short of expectations (medians were +1.0% for both measures). Adding to the poor tone of the report, sales volumes fell 0.6% in September.

Canada’s drop in retail sales volumes adds another hit to the September GDP outlook. Retail sales volumes fell 0.6% m/m in September after an 0.5% decline in August and a 0.3% fall in July, contrasting with the gains from January to June. Action Economics has cut its September GDP estimate to flat (0.0%) from the previous +0.1%. A flat reading in September GDP would leave the measure on track for a 1.5% pace in Q3 after the robust 4.5% gain reported for Q2 GDP. Notably, that is marginally below the 1.6% Q3 GDP projection from the BoC’s October MPR and hence does not contradict the BoC’s outlook.

The Canadian dollar fell about one-tenth of a cent to 78.59 US.

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