S&P/TSX composite gains nearly 250 points to end week on upswing
Canada’s essential inventory index rose nearly 250 factors in a broad-based rally Friday, ending the week on an upswing as Wall Street shares additionally posted robust features.
The S&P/TSX composite index was up 244.37 factors at 20,581.58.
“It was a really nice day in Canada today,” stated Colin Cieszynski, chief market strategist with SIA Wealth Management Inc.
He added that with crude oil rising greater than 2.1 per cent on the day and gold additionally gaining floor, Canada’s resource-heavy TSX was sure to get a bump.
“A good day for miners, a good day for energy, is a good day for Canada,” Cieszynski stated.
The rally was the cherry on high of what was Bay Street’s first week of features after three straight weeks of losses. Last week specifically was a tough journey for Canadian equities, which noticed their steepest losses for the reason that begin of 2023.
U.S. shares additionally gained on Friday, with the Dow Jones industrial common up 387.40 factors at 33,390.97. The S&P 500 index was up 64.29 factors at 4,045.64, whereas the Nasdaq composite was up 226.03 factors at 11,689.01.
Cieszynski stated markets look like settling in after what was a swift rise after which a ensuing fall within the first two months of the 12 months.
Early in 2023, Wall Street had rallied on hopes that cooling inflation would get the Fed to take it simpler on its hikes to rates of interest. But final month, the rally went into reverse after a number of reviews on the economic system got here in hotter than anticipated. They included information on the roles market, shopper spending and inflation itself at a number of ranges.
The robust information means traders have needed to resign themselves to the probability of extra rate of interest hikes by the U.S. Federal Reserve this 12 months, Cieszynski stated.
“It seems like people were kind of shocked at first, surprised if you will, and now people are getting more used to the idea again,” he stated.
As proof that traders are settling into their newly adjusted expectations, the yield on the 10-year U.S. Treasury bond fell again to three.96 per cent from 4.06 per cent late Thursday. It was a respite from its shot greater over the past month as expectations a couple of extra hawkish Fed helped to hike bond yields.
“The U.S. treasury 10-year yield coming back under four per cent is helping the markets generally,” stated Cieszynski.
Heading into subsequent week, Cieszynski stated traders can be watching the Bank of Canada’s subsequent rate of interest announcement set for Wednesday, to see if it really confirms a pause in charge hikes as anticipated.
“I suspect they will (pause),” he stated.
“But the (question) then is what does that mean for the Canadian dollar, if the Bank of Canada pauses officially while the U.S. Fed is still raising rates?”
The different factor to observe subsequent week, Cieszynski stated, is recent employment information coming from each the U.S. and Canada. The jobs market in latest months has remained constantly hotter-than-expected — and whereas that is nice news for employees, it additionally means that central banks might not but be prepared to ease up on their efforts to curb inflation.
“That’s the next big economic indicator coming, and of course it’s not just employment data, but everybody’s also watching wage inflation,” Cieszynski stated.
The Canadian greenback traded for 73.48 cents US in contrast with 73.45 cents US on Thursday.
The April crude contract was up $1.52 at US$79.68 per barrel and the April pure gasoline contract was up 24 cents at US$3.01 per mmBTU.
The April gold contract was up US$14.10 at US$1,854.60 an oz. and the May copper contract was down one cent at US$4.07 a pound.
This report by The Canadian Press was first revealed March 3, 2023.
— With recordsdata from The Associated Press
