Third week of gain for North American equities

Third week of gain for North American equities💯

Following the surprisingly strong US job report on Friday, US equities declined on the bet that the US central bank will be more determined to continue with its hawkish tone and interest rate hikes. S&P 500 and Nasdaq notched down 0.16% and 0.50% respectively and S&P/TSX Composite added 0.22%. 

US economy added 528,000 jobs in July, which is way above the expectation of 250,000. Canada, however, lost 31,000 jobs in July, recording the second month of decline, while the jobless rate remains at 4.9% since fewer people are actively looking for a job. The current market environment suggests that the good economic news that rules out recession risks negatively impacts the markets since it underlines inflationary pressures and interest rate hikes.

Canada’s trade surplus widened to5.05 billion in June, beating expectations. The number is the highest surplus since August 2008, led by higher energy product sales. 

Elsewhere, the Bank of England increased policy rates by 0.5% to 1.75%, which is the biggest increase since 1995. England expects inflation to peak at 13% in October. The economic pain and the impact on people"s savings will last for a while as expectations are for inflation to remain above the central banks’ target of 2% for the foreseeable future.