TORONTO — Canada's main stock index was up slightly Tuesday as gains in energy outweighed minor losses across other sectors, while U.S. markets were mixed but trending lower.
The S&P/TSX composite index was up 56.92 points at 20,277.41. The energy index was up 1.46 per cent.
In New York, the Dow Jones industrial average was up 3.07 points at 33,852.53. The S&P 500 index was down 6.31 points at 3,957.63, while the Nasdaq composite was down 65.72 points at 10,983.78.
It’s been a news-heavy day in Canada and abroad, resulting in a mixed bag for the markets, said Todd Mattina, chief economist at Mackenzie Investments.
Materials and energy outperformed the TSX Tuesday, leading to a slight gain in Canada versus a slip in U.S. markets, which were dragged down by tech and higher bond yields, said Mattina.
Canadian GDP data released Tuesday was overall higher than expected, but signalled some weakness in the underlying economic momentum that could lead investors to pin hopes on the Bank of Canada taking its foot off the interest-rate pedal sooner rather than later, said Mattina.
Residential construction and investment were particularly down, he said, adding that’s “not surprising given the Bank of Canada’s rate hiking cycle, but suggests that we’re going to be seeing slowing growth in coming quarters.”
Banks made headlines throughout the day as HSBC announced its Canadian unit will be bought by the Royal Bank of Canada. Meanwhile, Scotiabank saw its profits slip.
Scotiabank’s report wasn’t well-received by investors and its stock was down on the results, said Mattina, though weaker bank earnings may be a case of bad news being good news, he added, another signal that the central bank’s hikes are having their intended effect.
The Canadian dollar traded for 73.65 cents US compared with 74.33 cents US on Monday.
“The Canadian dollar has had a very big day,” said Mattina, as it fell further against the U.S. dollar. The dollar was affected by a number of drivers, he said, including GDP and the foreign exchange market.
Meanwhile, oil continued its recovery Tuesday after uncertainty about COVID restrictions in China affected outlook on global demand. There are now indications that China is updating its pandemic response, said Mattina, and the price is being further bolstered by the possibility of OPEC plus announcing production cuts at its next meeting.
The January crude oil contract was up 96 cents at US$78.20 per barrel and the January natural gas contract was up four cents at US$7.24 per mmBTU.
The February gold contract was up US$8.40 at US$1,763.70 an ounce and the March copper contract was up two cents at US$3.64 a pound.
This report by The Canadian Press was first published Nov. 29, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press