TORONTO — Strength in energy stocks helped buoy Canada's main stock index Monday, while U.S. stock markets also posted gains.
Monday saw a carry-over of the market’s upward momentum from the past couple of weeks, particularly on the Dow Jones index, said Angelo Kourkafas, an investment strategist at Edward Jones.
The S&P/TSX composite index closed up 34.61 points at 20,582.12.
In New York, the Dow Jones industrial average ended up 183.55 points at 35,411.24. The S&P 500 index was up 18.30 points at 4,554.64, while the Nasdaq composite was up 26.06 points at 14,058.87.
The biggest event this week will be the Federal Reserve’s interest rate decision Wednesday, said Kourkafas, but there’s no shortage of new information for investors all weeklong.
“Clearly this is going to be a big week for investors with economic data, the Fed and corporate earnings,” he said.
The Fed is widely expected to announce another quarter-percentage-point hike, said Kourkafas, echoing the Bank of Canada’s recent hike.
The overall narrative in Canada and the U.S. has been that inflation is moderating while the economy remains resilient, said Kourkafas, and more data Monday in the U.S. helped support that narrative.
“That feeds into expectations that what we’re going to hear from the Fed on Wednesday might prove to be the last rate hike,” he said.
Of course, even if Wednesday is the Fed’s last hike of the tightening cycle, they wouldn’t say so, said Kourkafas — officials will want to strike a balance between acknowledging progress but leaving the door open for further action should that progress stall.
“They don't want ... the markets to get ahead of themselves,” he said.
U.S. earnings continued to roll in on Monday, and this week will see a third of the S&P 500 companies reporting including some of the biggest tech names, said Kourkafas. While earnings expectations overall have been low for the second quarter, “expectations are high for some of these tech names that have rallied quite a bit,” he said.
North of the border, energy stocks led gains on the TSX as the price of crude continued its recent climb, rising more than two per cent to near US$79 per barrel.
The Canadian dollar traded for 75.92 cents US compared with 75.69 cents US on Friday.
The September crude oil contract was up $1.67 at US$78.74 per barrel and the September natural gas contract was down two cents at US$2.69 per mmBTU.
The August gold contract was down US$4.40 at US$1,962.20 an ounce and the September copper contract was up four cents at US$3.86 a pound.
This report by The Canadian Press was first published July 24, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
Note to readers: This is a corrected story. A previous version had the incorrect CAD/USD exchange rate for Friday July 21.
