The economic data docket south of the border was relatively light this week, though the housing market showed further signs of resiliency as existing home sales rebounded over 20% in June (albeit somewhat below expectations), while single-family new home sales soared 14% to a 13-year high and mortgage applications hung in at an 11-year high. Still, there was little desire to celebrate as persistent COVID outbreaks continue to put the broader economic recovery at risk—a point that was highlighted by the first weekly uptick in U.S. jobless claims since March.
The TSX came along for the ride, slipping 0.8% as substantial declines in health care and telecom outweighed gains in materials and energy. Aside from a hotter-than-expected inflation report, Canadian retail sales took the spotlight north of the border this week, as StatsCan revealed that May (actual) and June (estimated) data signalled a solid rebound powered by pent-up demand and continued government income support.
Overseas markets were also lower this week. Notably, equity markets in China took a step back amid escalating tensions with the U.S. after the two nations exchanged tit-for-tat consulate expulsions. Meantime, Germany and France skidded for three consecutive sessions following an agreement by EU leaders earlier in the week on the €750 bln EU Recovery Fund framework (which still has a few hurdles to jump), while U.K. stocks stumbled amid further unsuccessful attempts to advance trade deals with the U.S. or the EU.
|Table 1 - Market Performance|
|Source: BMO Economics, Bloomberg|