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TSX ends the worst month of 2019 with concerns about the economic slowdown, the new tariffs



Ross Marowits, the Canadian press

Posted on Friday, May 31, 2019 12:03 PM EDT

Last Updated Friday, May 31, 2019 17:42 EDT

TORONTO – Canada's main index ended its worst month of the year, citing growing concerns about the economic slowdown due to US plans to introduce tariffs for Mexican imports.

The composite index S & P / TSX closed 51.75 points on Friday at 16,037.49. It is 1.2 percent lower than a week ago and 3.4 percent lower in May.

However, the market in Toronto is 12 percent higher so far in 2019, after a very strong start of the year.

Most market viewers will be pleased with the year-to-year profits after they are able to withstand the collapse in December, says Kevin Hayland, a strategic investor in Manulife Investments

"Things are not necessarily bad, but they are not as good as they might have hoped and I think that's the reaction of the market," he said in an interview.

Helend said investors, particularly in the United States, reacted very badly to the news of US President Donald Trump's night by US President that he plans to expand his global trade war by imposing tariffs on all Mexican imports to put pressure on the country to do more to prevent migrants from entering the United States

The move also puts the risk of hampering the ratification of the revised trade agreement between the United States, Canada and Mexico, observers note.

However, Heffland said investor anxiety overcomes trade shootings with Mexico or China.

"It's not just a reaction to another set of tariffs, it's just more an indication that there is more pressure on the global economy," he said. "I think it's been read that things definitely have fun."

The data supported it. China's manufacturing activity declined in May, while the Canadian economy remains weak in the first three months of the year, rising by just 0.4 percent, and giving them the slowest vacations back in 2015.

Investor concerns can be noticed when declining yields from the bonds and inverting the yield curve, which raises concerns about a potential recession.

"We are now probably seeing that the risk of recession may rise and that the recession is likely to be in the next 12 to 18 months," he said.

Current weak data can also encourage the Federal Reserve and the Bank of Canada to cut interest rates.

"It's very rare to see drop in rates before the recession, and maybe this is a new environment or a less normal environment, where we may be seeing a rate cut and avoiding a true proverbial recession."

Eight of the 11 major TSX sectors fell on Friday, led by health care, energy and finance.

Energy fell 1.14 percent, while crude oil prices fell to the lowest level since February, amid concerns about declining global demand and higher reserves.

The crude oil contract in July was down $ 3.99 to $ 53.50 a barrel, and the July natural gas contract fell 9.3 cents to $ 2.45 per millimeter of BTU.

That's bad for Alberta oil, where Encana Corp. shares. lost 4.4 percent.

The heavyweight heavyweight sector lost more than one percent with Manulife Financial 2% and the West West Lifeco Inc by 1.8%.

The materials were led by the three sectors that increased, with the help of higher metal prices. Barrick Gold's shares rose 5.6 percent.

The gold deal in August was $ 18.70 to $ 1,311.10 an ounce and the July copper deal was 1.4 cents to $ 2.64 per pound.

The Canadian dollar traded on an average of 73.93 US cents compared to an average of 74.07 US cents on Thursday.

In New York, the industry average Dow Jones was reduced by 354.84 points to 24,815.04. The S & P 500 index was down 36,80 points to 2,752.06, while Nasdaq's composition was reduced by 114.57 points to 7,453.15.


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