TORONTO – Canada’s main stock exchange ended the trading day up more than 200 points, with U.S. equity markets also closing in positive territory, as momentum continued after a three-quarters percentage point rate hike outside the United States
TORONTO – Canada’s main stock exchange ended the trading day up more than 200 points, with U.S. equity markets also closing in positive territory, as momentum continued after a three-quarters percentage point rate hike in the United States on Wednesday.
The S&P/TSX Composite Index closed up 202.15 points at 19,456.71, with energy, industrials and utilities leading.
In New York, the Dow Jones industrial average rose 332.04 points to 32,529.63. The S&P 500 index gained 48.82 points to 4,072.43, while the Nasdaq composite rose 130.17 points to 12,162.59.
U.S. GDP data on Thursday also helped lift the market, although it showed the economy contracted for a second consecutive quarter, at an annual rate of 0.9%, after a down 1.6% in the first quarter.
“The stock market is up because the slowing economy is being interpreted as a lesser need for much tighter policy and rate hikes,” said Mike Archibald, vice president and portfolio manager at Investments. AGF Inc., interview.
He called it “economic trouble” and didn’t jump to talk about the recession.
“The market kind of extrapolates that we know there’s economic weakness,” he said. “The market action and some of the sectors that are doing quite well are related to growth, momentum – people are getting a little more constructive on some of the growth assets that have really been oversold.”
Canadian energy companies were in the spotlight this week, companies like Cenovus Energy Corp. posting a massive increase in their profits in the second quarter.
“Companies continue to generate massive amounts of free cash, balance sheets are in excellent shape, and they continue to return that capital to shareholders…if that continues to be the case, energy prices anywhere around this level will translate into huge financial benefits for these companies over the next few quarters,” Archibald said. “I expect to see more good results from energy companies.”
These companies appear to be managing inflation costs well at the moment, and management teams say it’s not a major concern at the moment, he added.
Two companies that will be the main drivers of market action on Friday are Amazon.com Inc. and Apple Inc.
After Thursday’s bell, Amazon reported better-than-expected second-quarter revenue, but the slowest growth rate in two decades.
“While this is not a terrible set of results from Amazon, the pattern of slowdown seen in the first quarter numbers has continued into the current trading period. This is particularly the case on the product front, where sales were down 2.5% year-on-year,” GlobalData chief executive Neil Saunders said in a note. “Meanwhile, sales through stores in Amazon’s line fell 4%. Both of these numbers are slightly lower than last quarter, indicating that Amazon is still struggling with much weaker consumer demand.”
Apple reported fiscal third-quarter earnings that beat analysts’ expectations for sales and earnings, but showed slowing growth.
The Canadian dollar was trading at 77.91 cents US versus 77.69 cents US on Wednesday.
The September crude contract was down 84 cents at US$96.42 a barrel and the September natural gas contract was down 42 cents at US$8.13.
The August gold contract was up US$31.20 at US$1,750.30 an ounce and the September copper contract was up almost five cents at US$3.47 per pound .
This report from The Canadian Press was first published on July 28, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X, TSX:CVE)
Adena Ali, The Canadian Press