5 from 5i: Value and Momentum Factors

Market Overview

Trump announced tariffs on the European Union, Mexico, and Canada. Both the E.U. and Canada followed up the announcement by saying they would impose countermeasures. Canada decided to impose retaliatory tariffs on $16.6 billion worth of U.S. exports. Worries about Italy due to latest political angst and a possible breakup of the Euro shook the markets. Trump announced that the North Korea summit is back on for June 12 in Singapore. The Bank of Canada today maintained its target for the overnight rate at 1.25%. The Canadian dollar stayed close to 77.12 cents US as trade war concerns continue. The TSX ended the week flat while the S&P 500 was up 0.4%.

All but three of the 12 TSX subgroups were higher, as energy jumped 2.8%, while consumer staples jumped 0.9%, and Healthcare and Industrials each jumped 0.9%. Shares of Kinder Morgan Canada remained flat after the federal government said it would buy the Trans Mountain pipeline project for $4.5 billion. The three laggards were Financials, down 1.4%, and Utilities, off 1.2% and Telecom down 0.9%. Losses in Financials were led by Bank of Nova Scotia, which reported quarterly results. In addition, Bank of Nova Scotia announced that it would buy MD Financial Management, a financial services company for Canadian doctors, in a $2.59-billion all-cash deal. Canada Goose announced plans to team up with a Chinese e-commerce company Alibaba Group, to tap into the rising consumer demand in China, in the fall of this year. Bombardier said it had completed the sale of 30 CS300 aircraft to Latvia's Air Baltic Corp. The most heavily traded shares by volume were Green Organic Dutchman Holdings, Bombardier, and Nemaska Lithium.

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