S & P / TSX composite record continues amid weak gains offset by commodities
TORONTO – The record for Canada’s main stock index continued on a calm trading day on Wednesday as investors took a break between the end of the first quarter and the earnings season starting next week.
“It was a time when investors are just waiting to see what happens next because the first quarter was definitely volatile,” said Greg Taylor, chief investment officer of Purpose Investments.
“Everything is really getting ready to see if this results season will be as good as everyone is expecting and I think it should be out of the ordinary given the comps year over year.”
The second quarter is expected to be significantly better than a year ago, when the impact of the COVID-19 pandemic began to hurt business results, as workers stayed at home and lockdowns began.
Investors are also watching if central banks are starting to pull away from gas in terms of stimulus, which appears to be in no rush to do so.
The minutes released after the recent Federal Reserve meeting reinforced this view, with the US central bank ready to let things unfold as members believe inflation increases are more transient than structural.
“This should be good for risky assets and I’m confident in the market for the next few months thinking we’re going to get a good run as the recovery continues to come,” Taylor said in an interview.
While the stock markets “might run for the next few months,” he said it might be harder to make money in the second half of the year as people start to fear things have gotten ahead and as central banks begin to relax emergency measures.
Jamie Dimon, CEO of JPMorgan Chase, was also optimistic about the US economic outlook in his annual letter which is closely followed by market watchers.
“What he’s saying is that there is a positive dynamic, there is so much money out there that it has to go somewhere and that could keep the bull market going longer than everyone else. think so, ”Taylor said.
The S & P / TSX Composite Index gained 24.93 points to a record close of 19,129.07 after setting an intraday high of 19,177.96.
In New York, the Dow Jones industrial average rose 16.02 points to 33,446.26. The S&P 500 Index was up 6.01 points to a record close of 4,079.95, while the Nasdaq composite was down 9.54 points to 13,688.84.
Seven of the TSX’s top 11 sectors rose, but none rose more than 0.77%.
A 3.7% gain by Alimentation Couche-Tard Inc. helped consumer staples while Gildan Activewear Inc. rose 3% to help discretionary consumers.
The day also saw shares of MDA Inc. start trading after its IPO. They closed 3.9 percent at $ 14.55.
Healthcare lagged the most, losing 2.4%, with Aurora Cannabis Inc. and Aphria Inc. losing 6.4 and 6% respectively.
Energy and materials have also lost ground.
Energy fell despite rising crude oil prices, as investors worried if pandemic lockdowns in Canada and Europe could hurt demand. There are also fears that the prospects of a new nuclear deal with Iran may bring more oil to the market, Taylor said.
Ultimately, energy should have a good year after being overlooked by so many investors, he said.
“Companies have restructured and are much more profitable at these levels and if oil starts to hold over $ 50, over $ 60, I think those companies are still set for a really positive 2021.”
Canadian Natural Resources Ltd. fell 1.6%.
The May crude contract rose 44 cents to US $ 59.77 per barrel and the May natural gas contract rose 6.4 cents to US $ 2.52 per mmBTU.
The Canadian dollar traded at 79.26 US cents compared to 79.62 US cents on Tuesday.
Materials fell due to the appreciation of the US dollar which reduced gold prices. The June gold contract fell US $ 1.40 to US $ 1,741.60 per ounce and the May copper contract fell 6.2 cents to US $ 4.05 per pound.
This report by The Canadian Press was first published on April 7, 2021.
Companies in this story: (TSX: CNQ, TSX: ATD.B, TSX: GIL, TSX: MDA, TSX: GSPTSE, TSX: CADUSD = X)
Ross Marowits, The Canadian Press