S&P/TSX composite gains nearly 200 points to continue Friday's strong move higher
Energy and commodities led Canada's main stock index to continue its upward climb, however U.S. stock markets dipped after posting their best week since 2020.
The energy sector was bolstered by a rise in crude oil prices as Europe is preparing to impose additional sanctions against Russia.
Mona Mahajan, senior investment strategist at Edward Jones, said there's also probably a bit of a rebound after some weakness last week.
“But also, I think we're starting to hear more about Russian oil in Europe being banned,” she said in an interview.
And the G7 meeting taking place this week may lead to an agreement to impose price caps on Russian oil, Mahajan said.
“Those caps would limit how much money Russia could earn from each barrel of oil sold on the global market. But also Europe would limit potentially the availability of shipping and insurance services.”
The August crude contract was up US$1.95 at US$109.57 per barrel and the August natural gas contract was up 26.5 cents at US$6.55 per mmBTU.
Vermilion Energy Corp. led the sector higher, jumping 11.7 per cent, followed by Advantage Oil & Gas Ltd., up 6.8 per cent.
The Canadian dollar traded for 77.60 cents US compared with 77.32 cents US on Friday.
Materials rose 2.0 per cent despite weaker bullion prices as grain and other commodity prices increased.
The August gold contract was down US$5.50 at US$1,824.80 an ounce and the September copper contract was up 2.2 cents at US$3.77 a pound.
Overall, the S&P/TSX composite index closed up 195.41 points to 19,258.32 after posting its strongest day in six weeks on Friday.
U.S. markets didn't keep up with the pace set to end the week as the Dow Jones industrial average was down 62.42 points at 31,438.26. The S&P 500 index was down 11.63 points at 3,900.11, while the Nasdaq composite was down 91.96 points at 11,515.66.
“I think we're seeing a little bit of the markets reflecting some potential growth concerns,” Mahajan said.
Ten-year bond yields climbed Monday and high yield spreads widened, which could be indicative of a potential default cycle ahead.
“So I think we're starting to see signs of a market sniffing out some of the potential softening in economic growth,” she said, adding that supports the idea that the U.S. Federal Reserve may pull back on some of its rate hiking moves.
“We saw a rebound in market activity today, probably taking a little bit of pause until we digest some of the upcoming economic data,” Mahajan said, referring to core inflation numbers expected to be released on Thursday, and a GDP reading and consumer confidence results on Tuesday.
The heavyweight financials sector was higher, as 10-year bond yields increased in Canada and the U.S. Most banks were positive with Canadian Western Bank and Bank of Nova Scotia leading at 1.9 and 1.8 per cent, respectively.
Technology was the biggest laggard, losing nearly 1.6 per cent with Hut 8 Mining Corp. down 6.7 per cent and Shopify Inc. 3.3 per cent lower.
While corporate valuations have compressed quite a bit, earnings forecasts have a way to go to catch up, said Mahajan.
Inflation should start to show signs of moving lower, she said, which will allow global central banks to gradually reduce the pace of rate hikes which would support sentiment. But that could take several positive readings and won't affect next month's expected three-quarters of a percentage point hike in interest rates.
This report by The Canadian Press was first published June 27, 2022.
As rent prices rise, CTVNews.ca heard from a number of Canadians struggling to afford their homes. The surge in rent prices over the last few months has forced many to cut back on spending, with some having to relocate or move in with their parents.
At a time of high inflation, questions about what cards to use, how much local cash to withdraw and which currency conversion services to avoid are particularly valuable. Here's what to know when seeking cost-effective methods of spending money overseas.
CTVNews.ca has compiled a list of homes in some of the most affordable regions across Canada, as many real estate markets see drops in average prices.
The next time the Bank of Canada raises interest rates on the scheduled date of September 7, 2022, it could potentially trigger a recession. Although there may be a chance that we don’t enter into a recession and the BoC is still hoping for a soft landing, it’s best to be prepared. Contributor Christopher Liew explains how.
Rising interest rates might be bad news for Canadians with mortgages, but it also means higher rates on savings vehicles such as guaranteed investment certificates (GICs), prompting renewed interest in the investments.
Factors beyond your control, like inflation or supply chain shortages, can limit your access to the things you need and make it harder to achieve your financial goals.
Amid high inflation and rising cost of living, a person's relationship status can impact their finances. There are five ways in which flying solo can put you at a financial disadvantage and a few ways to mitigate them.
For millennial and gen Z Canadians, owning a home in this real estate market might seem like a pipe dream. In an exclusive column for CTVNews,ca personal finance contributor Christopher Liew offers some strategies to consider if you can’t afford the housing market yet.