Global equity markets were mixed as rising long-term government bond yields exerted further pressure on equity valuations. Economic confidence indicators continued to improve. Oil prices fell sharply after reports of climbing U.S. crude inventories and a forecast from the International Energy Agency declaring a sustained surge in oil prices was unlikely.
The S&P/TSX Composite Index was flat as gains in communications, discretionary, and financials were offset by weakness in energy, staples, health care, and technology. Short-term Canadian government bond yields edged lower in anticipation of whether or not the Bank of Canada will begin scaling back its bond purchasing program next month.
The S&P 500 Index (C$) declined amid pronounced weakness in energy. Financials and technology also declined while communications, health care, and staples advanced. Confidence indicators from the New York Fed’s Manufacturing Survey and the Philadelphia Fed’s Business Outlook Survey pointed to robust near-term economic growth prospects.
The MSCI EAFE Index (C$) advanced led by health care, REITs, consumer sectors, and technology. Energy, materials, and communications declined. European equities strengthened as Germany’s ZEW survey strengthened pointing to economic optimism. Japanese equities also rose as Tokyo lifted its state of emergency