TORONTO - Gains in energy, technology and base metals helped lead a broad-based rally on Canada's main stock index Tuesday, which rose 1.32 per cent, while U.S. markets also posted gains.
The S&P/TSX composite index closed up 265.27 points at 20,290.41.
In New York, the Dow Jones industrial average was up 292.69 points at 34,852.67. The S&P 500 index was up 64.32 points at 4,497.63, while the Nasdaq composite was up 238.63 points at 13,943.76.
Stocks rose on a pair of economic reports that showed a continued downtrend in the data that informs central bank decisions on interest rates, said Lesley Marks, chief investment officer of equities at Mackenzie Investments.
“I guess it’s the case of bad news is good news,†said Marks.
The U.S. government reported that job openings in July fell to the lowest level since March 2021.
“Job openings are a key indication of the health of an economy,†said Marks.
Meanwhile, the Conference Board reported that consumer confidence fell in August.
“This is another indication of a slowdown in the U.S. economy, and particularly in the case of consumer confidence, a leading indicator for future consumer spending,†she said.
The reports are part of a larger set of economic data releases this week, all of which the U.S. Federal Reserve will be closely eyeing ahead of its September interest rate decision, said Marks.
Evidence of cooling in the economy helps boost confidence that the central bank will pause rates in September, and perhaps even forgo another hike in the fall, she said.
In Canada, major banks continued to report earnings. BMO Financial Group saw its profit for the latest quarter take a hit from severance costs and rising provisions for bad loans, while Scotiabank saw its profit fall as provisions for credit losses nearly doubled.
The banks are an important indicator for the ºÚÁϳԹÏÍø economy, said Marks.
“I think the bank stocks have been reflecting weakness, and an expectation that earnings would be weak,†she said. “And I think that’s what we got from the ºÚÁϳԹÏÍø banks.â€
The lenders are also looking to reduce costs, partly in the form of job cuts, noted Marks. Since they are large employers, this could foreshadow some weakness for the ºÚÁϳԹÏÍø consumer as well, she said.
“The story on balance is they’re managing through a more challenging environment,†she said.
“I think what we’re really starting to see finally is the impact of higher interest rates across the economy here in Canada and the U.S.â€
The ºÚÁϳԹÏÍø dollar traded for 73.57 cents UScompared with 73.55 cents US on Monday.
The October crude contract was up US$1.06 at US$81.16 per barrel and the October natural gas contract was down less than a penny at US$2.66 per mmBTU.
The December gold contract was up US$18.30 at US$1,965.10 an ounceand the December copper contract was up five cents at US$3.84 a pound.
-- With files from The Associated Press and Ian Bickis
This report by ºÚÁϳԹÏÍø was first published Aug. 29, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
