Canada’s stocks and its single-country exchange traded fund are trying to get back on track with the help of the key energy and mining sectors. The country reports gross domestic product later this week.
The Toronto stock exchange started the week on the right foot. Energy and mining shares provided the push to help the S&P/TSX Composite rise 1.4% on Monday, after a healthy rise of 2.7% last week.
The iShares MSCI Canada Index (NYSEArca: EWC) also rose due to the exposure of energy and materials shares within the fund. Energy accounts for 27.3%, while materials makes up 21.5% of the ETF. The Canadian ETF can also be a proxy for a commodities play.
Myra Saefong for MarketWatch reports that base metals miners in Canada made some of the largest gains, while energy shares benefited from the 2% rise in oil futures prices. [ETF Spotlight: iShares MSCI Canada Index]
“The market is figuring in a 40 %chance of a double dip recession,” said Sebastian van Berkom for Van Berkom & Associates, in the report. “Any kind of clues that maybe that’s not going to happen is going to help.” [Canada ETFs and Political Change]
Scotia Capital analysts are waiting on the Canadian GDP report, due Wednesday. According to Scotia analysts, the market consensus estimates are for a small 0.1% month-on-month rise for June. Investors have their ears tuned into the banks earnings season in Canada this week, too, with Bank of Nova Scotia getting ready to report, followed by CIBC.
The Canadian dollar is also stronger, with the U.S. dollar at 97.75 Canadian cents, just a drop down from last week, reports Saefong. The CurrencyShares Canadian Dollar Trust (NYSEArca: FXC) gained 0.5% in Monday’s trading. [Risk Aversion Sends Traders to Safe Haven Currencies, ETFs]
“Investors feel that there is a little bit more breathing room from what the Fed had to say on Friday,” said Serge Pepin of BMO Investment Inc., on Reuters. “We know that the Fed and the central banks are staying vigilant.”
iShares MSCI Canada
Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.
Tisha Guerrero contributed to this article.