By Rosa Saba, The Canadian Press on February 6, 2024.
TORONTO – Strength in base metal stocks helped lead modest but broad-based gains on Canada’s main stock index, while U.S. markets ticked higher.
The S&P/TSX composite index closed up 85.85 points at 20,957.74.
In New York, the Dow Jones industrial average was up 141.24 points at 38,521.36. The S&P 500 index was up 11.42 points at 4,954.23, while the Nasdaq composite was up 11.32 points at 15,609.00.
A day without major earnings or economic data gave investors some time to digest the moves of the past week, said Stephen Duench, vice-president and portfolio manager for AGF Investments Inc.
U.S. markets recently reached record heights even as expectations for an interest rate cut were pushed back from March amid ongoing economic strength.
So on a quieter day, it’s a “huge positive” that markets are more or less holding on to those gains, said Duench, noting that February has historically been volatile and negative.
The bond market calmed down somewhat on Tuesday after Treasury yields had been on the rise in recent days.
U.S. earnings expectations have been overall met or exceeded so far, said Duench. But those companies that missed were punished more than usual, he added.
“There’s definitely a bit of skepticism in the market … or at least a little bit of negativity in the market if you did miss your earnings.”
Expectations for Canadian companies’ earnings are lower than they were for U.S. firms, said Duench, meaning there’s opportunity for some positive surprises as reports start rolling in over the coming week.
Next week will see a big batch of economic data in the U.S. that, if they come in softer, could solidify new expectations that interest rate cuts will begin in May, said Duench, noting that March is off the table.
“Softer economic data, as we progress through the month, will actually increase the May odds,” he said.
Meanwhile, it’s possible the Bank of Canada could cut first, he said, given the weaker economic data continuing to come in north of the border.
The Canadian dollar traded for 74.04 cents UScompared with 73.93 cents on Monday.
The March crude oil contract was up 53 cents at US$73.31 per barrel and the March natural gas contract was down seven cents at US$2.01 per mmBTU.
The April gold contract was up US$8.50 at US$2,051.40 an ounce and the March copper contract was up one cent at US$3.78 a pound.
– With files from The Associated Press
This report by The Canadian Press was first published Feb. 6, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)