Canadian Stocks Are Rebounding As Oil Prices Stabilize -- Canadian Commentary

(RTTNews) - The Canadian stock market is bouncing back from a sharp two session decline on Wednesday, as oil prices have stabilized after they had fallen below $48 per barrel. Investors have begun to exit safe havens, as evidenced by the drop in the price of gold.

Markets across the globe are rebounding from the recent sell-off, including the United States, which reported strong private sector employment data. The U.S. trade deficit also shrank more than had been expected. Investors will be watching for the release of the minutes from the most recent Federal Reserve meeting later this afternoon.

Private sector employment in the U.S. increased more than expected in the month of December, according to a report released by payroll processor ADP on Wednesday. ADP said the private sector added 241,000 jobs in December following an upwardly revised increase of 227,000 jobs in November. Economists had expected private sector employment to increase by about 235,000 jobs.

The Commerce Department said the trade deficit narrowed to $39.0 billion in November from a revised $42.2 billion in October. The trade deficit in November reflected the smallest since December of 2013. Economists had expected the deficit to shrink to $41.5 billion.

Investors continue to keep an eye on Europe. The result of general elections in Greece will determine whether the debt-ridden country remains a member of the Eurozone. The election is scheduled for January 25.

Details continue to unfold in Paris, where a terrorist attack on the office of the French satirical magazine Charlie Hebdo resulted in the deaths of an estimated 12 people, including 2 police officers. The attack is believed to have been carried out in retaliation for the publication's satire of the prophet Muhammad.

Eurozone inflation turned negative for the first time in more than five years in December, driven by a steep fall in energy prices. The decline in prices adds more pressure on the European Central Bank to deliver huge quantitative easing later this month.

The Harmonized Index of Consumer Prices fell 0.2 percent year-on-year in December, reversing the 0.3 percent rise in November, flash estimate from Eurostat showed Wednesday. Prices were expected to drop by 0.1 percent.

The Canadian trade deficit widened to C$644 million in November the government statistical agency announced Wednesday. Analysts had expected a deficit of C$200 million for the month. Exports to the United States decreased by 2.6 percent in November.

The benchmark S&P/TSX Composite Index is up 138.33 points or 0.97 percent at 14,385.10 .

On Tuesday, the index closed down 145.93 points or 1.01 percent, at 14,246.77. The index scaled an intraday high of 14,370.40 and a low of 14,161.98.

The Energy Index is rising by 1.64 percent, as the price of oil attempts to rebound. Suncor Energy (SU.TO) is up 1.08 percent and Canadian Natural Resources (CNQ.TO) is higher by 0.70 percent. Cenovus Energy (CVE.TO) and Encana (ECA.TO) are both rising by 0.52 percent. Pacific Rubiales (PRE.TO) is surging by 5.31 percent and Canadian Oil Sands (COS.TO) is up 0.24 percent.

The Financial Index has also turned positive Wednesday, following the weakness of the previous 2 sessions. Bank of Nova Scotia (BNS.TO) is climbing by 0.09 percent and Toronto-Dominion (TD.TO) is up 0.08 percent. Royal Bank of Canada (RY.TO) is increasing by 0.45 percent and National Bank of Canada is higher by 0.82 percent.

The Health Care Index is climbing by 0.80 percent. Valeant Pharmaceuticals Group (VRX.TO) is up 1.97 percent and Extendicare (EXE.TO) is rising by 0.78 percent.

The Gold Index is down 0.64 percent today, as investors vacate the safe haven. Royal Gold (RGL.TO) is falling by 0.78 percent and Franco-Nevada (FNV.TO) is down 0.47 percent. Alamos Gold (AGI.TO) is losing 0.40 percent and Kinross Gold (K.TO) is lower by 1.01 percent.

Air Canada (AC.TO) is up 1.28 percent, after its traffic in December rose 8.3% from a year ago to 4.99 billion revenue passenger miles.

WestJet Airlines (WJA.TO) is adding 1.01 percent, after it reported December 2014 traffic results with a load factor of 80.9 percent. Revenue passenger miles or RPMs, or traffic, increased 5.1 per cent year-over-year to 1.85 billion from 1.76 billion last year, and capacity, measured in available seat miles or ASMs, grew 6.1 percent year-on-year to 2.29 billion.

In commodities, crude oil futures for February delivery are up $0.45 or 0.94 percent at $48.38 a barrel.

Natural gas for February is up $0.029 or 0.99 percent at $2.967 per million btu.

Gold futures for February are down $6.20 or 0.51 percent at $1,213.20 an ounce.

Silver for March is down $0.087 or 0.52 percent at $16.55 an ounce.