Defensive gold boosting materials sector, says expert

In Canada, healthcare stocks continue to underperform significantly. But defensive gold names are aiding the materials sector, says Prab Sagoo, associate director at Nasdaq Advisory Services, in his weekly market commentary.

Highlights:

• The TSX continues to oscillate between the 12,000 and 13,000 levels, with technical resistance continuing to occur at its 50-day moving average.
• A tentative agreement between major oil producers has helped markets rally, though oil prices remained submerged below the $30-per-barrel level. The market continues to treat this recent news with skepticism, especially as Iran has pledged to try and return to pre-sanction levels of output. But, this should provide some good news for the beleaguered energy and financial sectors. Read: Russia, Saudis tentatively offer to freeze oil output levels
• Motor sales helped domestic manufacturing data beat expectations for the second consecutive month. This should please the Bank of Canada and the Trudeau government, both of which are hoping that manufacturers are benefiting from a lower dollar and offsetting some of weakness elsewhere in the economy. However, expected stimulus spending from the government would likely be the next external catalyst to further aid the recovery. Read: Don’t depend on interest rates to shore up the economy
• Friday will see domestic inflation and retail sales data released. The releases will be closely watched to see how inflation levels are progressing, given the depressed energy price environment and the state of the Canadian consumer. Read: U.S. consumers craving luxury products

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.