For the first time in three months, retail sales in Canada recorded an increase.
Statistics Canada reported on Friday that sales rose 0.4% in July to $51.5 billion. Sales were higher in six of 11 subsections, with cannabis stores helping to lead the charge thanks to a 14.3% increase in sales as they topped $100 million for the first time. This represented 1.7% growth in miscellaneous store retail. Motor vehicle and parts sales climbed 1.5% on higher sales at new car dealers. This is just 0.2% shy of the expected increase by economists.
Meanwhile, the US Federal Reserve announced interest rate cuts earlier this week. The connection? Retail sales in the US continue to be strong as consumers continue to spend and both the Canadian and American job markets are in decent shape. It is widely expected that Canada’s central bank will follow the Fed’s move to cut interest rates and what happens in one market could mirror the other. The TSX has been carving new territory as it reached greater highs day after day this week while the Dow and S&P 500 both sit less than 1% from their all-time highs.
In an interview with CNN, speaking on how investors can “adjust to this lower rate world”, chief investment strategist for QMA, Ed Keon said that investors should remain cautious. He added that he prefers value stocks asa bargain over growth stocks and many pay healthy dividends.