BREAKING Bob Cole, veteran CBC broadcaster and former voice of 'Hockey Night in Canada,' dead at 90
Bob Cole, legendary CBC broadcaster and former voice of Hockey Night in Canada, has died. He was 90.
Canada's main stock index posted another day of triple-digit gains and U.S. markets were mixed Thursday against the backdrop of mounting evidence that inflation may be beginning to ease.
Though the areas affected by a power outage in downtown Toronto Thursday did include Bay Sreet, Toronto's main stock exchange remained open for trading. TMX Group spokeswoman Catherine Kee said its trading systems were not impacted by the outage because its power systems are backed up.
The S&P/TSX composite index closed up 105.94 points at 19,991.88.
In New York, the Dow Jones industrial average also closed up 27.16 points at 33,336.67. But the S&P 500 index closed down 2.97 points at 4,207.27, while the Nasdaq composite was down 74.90 points at 12,779.91.
Markets were coming off a strong rally on Wednesday caused by the release of a cooler-than-expected reading on U.S. inflation at the consumer level.
Thursday morning's release of another U.S. report - this one on inflation at the wholesale level, which also came in cooler than economists had expected - spurred markets to rise early in the day, though they then gave up most of those gains later in the afternoon.
Inflation has been the story of the day on the markets for months, and both Wednesday's and Thursday's U.S. reports raised hope among investors that the peak has already been reached and that central banks will be less aggressive about raising interest rates than feared.
But while the week has certainly brought a string of better news on the inflation front, said Michael Greenberg, SVP and portfolio manager with Franklin Templeton Investment Solutions, the optimists may be jumping the gun.
Greenberg pointed out that while July's inflation numbers south of the border did come in better-than-expected, other areas that central bankers watch closely - such as housing and labour - still show signs of overheating. And even though the pace of inflation may have eased, the overall rate is still far higher than the two per cent central banks are targeting.
“I think the market is somewhat expecting central banks to wrap up their hiking cycle a little bit earlier, and perhaps even switch to easing policy if the economy continues to slow,” Greenberg said.
“Our view is we might have to wait a little bit longer for that. Because yes, inflation's coming off the boil, but it's probably not going to come down to the targets that central banks want to see just yet.”
The price for both crude oil and natural gas rose again on Thursday, apparent proof that - while energy prices have backed off somewhat from their spring highs - they aren't in for a drastic decline anytime soon.
While concerns about overall economic growth may have pushed the price of oil down slightly, the war in Ukraine continues to put pressure on global supply, Greenberg said.
“And from a weather perspective, we've seen obviously a hot and dry summer in a lot of parts of the world, which is increasing demand for energy,” he added.
Second quarter earnings reports from companies in both the U.S. and Canada continued to trickle in on Thursday. While in general, markets have received a boost from the quarter's better-than-expected performance, Greenberg cautioned that the remainder of the year will be more challenging.
“Prices are still fairly high. And with interest rates rising, that could affect consumers and consumer demand,” Greenberg said. “So what we're really looking for is how companies are going to manage that. . . we think there might be some challenges on the corporate front to maintain the margins and earnings momentum we've seen.”
In the meantime, Greenberg said investors will continue to watch for any hint from the Bank of Canada or the U.S. Federal Reserve about what they plan to do about interest rates going forward. What equity markets are most concerned about is that central banks move too aggressively to curb inflation, and inadvertently tip the North American economy into a full-blown recession.
“The challenge is going to be walking that tightrope and getting it right. It's going to be really a delicate dance,” Greenberg said.
The Canadian dollar traded for 78.41 cents US compared with 78.19 cents US on Wednesday.
The September crude contract was up US$2.41 at US$94.34 per barrel and the September natural gas contract was up 67 cents at US$8.87.
The December gold contract was down US$6.50 at US$1,807.50 an ounce and the September copper contract was up six cents at US$3.71 a pound.
This report by The Canadian Press was first published Aug. 11, 2022.
Bob Cole, legendary CBC broadcaster and former voice of Hockey Night in Canada, has died. He was 90.
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