Following a slow start to the week, the TSX tried to regroup after the Canada Day break, but Friday’s rally fizzled somewhat, and the index closed a hair lower on the week. Consumer staples and telecom were bright spots but declines in health care and financials were too large to overcome. Energy also declined even as WTI briefly rose above $76 for the first time since 2018. Drama at this week’s OPEC+ meeting, which was postponed by a day, provided for choppy oil trading given the inability to finalize a new production cut deal, but ultimately WTI notched its sixth straight weekly increase.
In Asia, China’s equity market continued to underperform, with the CSI 300 notably turning negative year-to-date (-2.5%) as China’s manufacturing PMIs slowed to 4-month lows, though as Jennifer Lee noted in this week’s Focus, “some of that was self-imposed as businesses held back on power usage given the government’s carbon emissions targets and instructions to ease up on coal imports.”
In Japan, the Nikkei index has been stuck in a rut since mid-February, with enthusiasm dampened this week by a steep decline in auto production, largely reflecting semiconductor shortages. A pick-up in the 7-day COVID-19 infection rate hasn’t helped matters, with authorities now pondering a further extension of state of emergency measures and PM Suga warning of a closed-door Olympics.