By James Langton
(June 9 – 13:00 ET) – Markets spiked following the release of benign U.S. inflation data this morning, before settling into a lazy trade through the morning. Volume is characteristically low for a summertime Friday — just 61.5 million shares. The TSE 300 is up 65 points to 9717, with the volume coming in almost 4:1 in favour of buyers. Advancers are ahead of decliners about 11:7.
The U.S Producer Price Index came in soft this morning helping to assuage interest rate concerns. In Canada, a strong jobs report confirmed a healthy economy, but didn’t spark fears of inflation.
Some traders are still cautious about future rate hikes, however, the “good news-good news” scenario is putting a positive spin on today’s trading. Ten of the TSE’s 14 groups are up at midday led by the utilities and joined by financials, industrials and consumer stocks. Only gold is showing real weakness.
The utilities are, of course, driven by the telecoms. BCE Inc is enjoying strong gains. That is filtering through the sector broadly construed. Gains are apparent for JDS Uniphase, Research in Motion, Ballard Power, 724 Solutions, Tundra Semi, ATI and Corel. Nortel Networks is up a bit.
Insurers are pushing the financials higher, led by active trading in Manulife up 3%. The dovish rate picture is fueling that rise.
In New York, trading also took a positive tone at the open, thanks to the PPI. Many economists continue to predict that the recent spate of benign releases will keep rates steady through June. After this morning’s initial pop, however, many traders apparently left for Conneticut, causing volume to ebb. The Dow is up just 12 points to 10681. Nasdaq is a little more determined, up 44 points to 3870. The S&P has gained three ticks to 1464.
The small caps are joining the lazy rally too. At midday, the CDNX is up seven points to 3460 on light volume of 16 million shares. Techs are leading the way with slight gains in miners and oils too. Nexttrip.com is the hot trader, up 20% to 35¢ on 1.4 million shares.