TSX Down 20 Points at Midday With All Sectors Lower

The Toronto Stock Exchange is down 20 points at midday with all sectors lower.

Healthcare and technology are the biggest decliners, both down 1%. Oil prices fell for a fourth-straight day early on Friday on concerns over rising supply even as the high-demand summer driving season begins this weekend with the U.S. Memorial Day holiday. Gold was sharply higher as the dollar plunged after U.S. President Donald Trump threatened to impose 50% tariffs on imports from the European Union on June 1, adding yet more turmoil for the global economy and raising safe-haven demand.

Scotiabank noted that Bank of Canada Governor Tiff Macklem remarked yesterday that uncertainty had declined. He spoke too soon as Trump escalated trade wars again today in a series of posts on social media, where he prefers to conduct policy. The EU and Apple are his targets this time.

On the home front, Scotia noted, Canadian consumers continue to spend. Today's data showed March nominal retail sales were up 0.8% month over month seasonally adjusted, a tick above prior guidance from Statcan. In volume terms, sales were up by 0.9% m/m, indicating a touch of retail price softness. Scotia added that advance guidance for April's sales points to a further nominal rise of 0.5% m/m.

According to Scotia, Canadian March GDP is looking like it was up 0.2% to 0.3% m/m, compared with earlier flash guidance it would be up 0.1%. April is looking like another 0.3%, with those numbers out next Friday. Scotia added that suggests first-quarter GDP at 1.7% q/q SAAR and very tentatively provides tracking at a similar pace for the second quarter based on limited known information to date. "That's an economy that prior to tariff effects going forward was growing at about potential."

Elsewhere, CIBC said its forecast for a contraction in GDP in April and Q2 as a whole is driven more by expected weakness in manufacturing and other sectors more directly impacted by U.S. trade. It noted advance figures for those areas are due to be released early next week.

CIBC's Katherine Judge recently said on BNN Bloomberg TV that the bank sees a 25 bps rate cut in June and again in July.