Welcome back to the Canadian Monthly Market Wrap from YCharts! Here, we break down the most important market trends for Canada-based advisors and their clients every month. As always, feel free to download and share any visuals with clients and colleagues, or on social media.
Canadian equities were a mixed bag in May, with Canadian Large Caps leading the charge, up 1.7%. The S&P/TSX 60 index inched up (for you true Canadian readers, “centimetered up”) 0.2%, while Canadian Small Caps dipped 0.2%. South of the border, the S&P 500 rose by that 0.2% as well.
Prior month employment data was strong. Most notably, the Canadian unemployment rate fell to an all-time low of 5.2%. However, manufacturing slowedaccording to the Canada Ivey PMI, which fell 10.7% month-over-month from its all-time high in March. The Canada Inflation Rate rose for a tenth straight month to 6.77%, further closing in on a 31-year high. Finally, Canadian gas stations have been filling up their cash registers as of late—according to March data, record high gas prices have helped Canadian Gasoline Stations’ Retail Sales skyrocket to all-time highs.
The Canada Ivey PMI fell to 66.30 in April, down 10.7% from its all-time high of 74.20 set just two months ago in March. However, the Canadian economy continued its rebound from the COVID-19 pandemic, with Canada Real GDP increasing 0.7% in March.
The Canada New Housing Price Index rose 0.32% in April, a significant retracement from March’s 1.22% surge, but still clocked in above its all-time monthly average of 0.24%.
Consumers and Inflation
Unlike in the US, where inflation declined for the first time in over half a year, the Canada Inflation Rate increased for a tenth consecutive month to 6.77%. April’s inflation print is Canada’s highest since January 1991, when it was 6.91%. Canada’s Consumer Price Index marched upward with inflation, rising 0.67% in April.
The price of gold was $2,362.80 CAD per ounce as of May 27th, a monthly decrease of 3.3%, while the iShares S&P/TSX Global Gold ETF (XGD.TO) tumbled 10.9% and is now up just 1.1% year to date.
Oil continued climbing in May, with the per barrel daily spot prices of WTI and Brent Crude rising to $110.32 USD and $115.13 USD, respectively. The surges in oil prices sent Canadian gas prices to all-time highs in turn. Further downstream, Retail Sales among Canadian Gasoline Stations hit an all-time high of $6.73B CAD in the month of March, up 32.1% from a year ago.