S&P/TSX composite gains 200 points Tuesday, U.S. markets also up
S&P/TSX composite gains 200 points Tuesday, U.S. markets also up
TORONTO -
Canada's main stock index gained almost 200 points Tuesday with broad-based strength across sectors while U.S. markets also rose, erasing Monday's losses.
The S&P/TSX composite index was up 195.27 points at 20,767.38.
January appeared to end on a note of cautious optimism, echoing the month’s overall trend, said Stephen Duench, vice-president and portfolio manager for AGF Investments Inc.
“I do believe that most of today's flow is really just … kind of a continuation of what we've seen on trends to start the year in 2023.”
In New York, the Dow Jones industrial average was up 368.95 points, or more than one per cent, at 34,086.04. The S&P 500 index was up 58.83 points, or almost 1.5 per cent, at 4,076.60, while the Nasdaq composite was up 190.74 points, or almost 1.7 per cent, at 11,584.55.
It was a great month for the companies and sectors that didn’t perform well last year, like tech, Duench noted — the Nasdaq was up almost 11 per cent for the month, while the Dow gained almost three per cent and the S&P 500 more than six per cent.
New data Tuesday showed Canadian GDP growth cooling in the fourth quarter of 2022, with economists saying it's evidence that rate hikes are beginning to take effect.
And in the U.S., a report showed that growth in worker pay and benefits slowed during the end of 2022.
With economic data showing inflation cooling, there’s more hope than there was a month ago for a soft landing as the central banks wind down their rate hike cycles, he said.
That hope hasn’t been fully priced in yet, but the tone has definitely shifted, said Duench.
The Federal Reserve is widely expected to raise its key interest rate another 25 basis points Wednesday, though 50 points isn’t out of the question, said Duench. Investors will be looking for any signs in the central bank’s commentary that it’s gearing up to pause its hikes.
But the Fed is not likely to be as definitive with its messaging this time as the Bank of Canada was last week, said Duench.
“I think it'd be surprising … if they came with dovish rhetoric tomorrow.”
The Canadian dollar traded for 74.91 cents US compared with 74.87 cents US on Monday.
The March crude contract was up 97 cents at US$78.87 per barrel and the March natural gas contract was up a penny at US$2.68 per mmBTU.
The April gold contract was up US$6.10 at US$1,945.30 an ounce and the March copper contract was up two cents at US$4.23 a pound.
This report by The Canadian Press was first published Jan. 31, 2023.
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