The S&P/TSX composite index is higher; US stock markets down on inflation concerns

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Canada’s main stock index rose on Thursday, even as U.S. markets slid on lingering investor worries about inflation and rising interest rates.

In Toronto, the S&P/TSX Composite Index rose 17.68 points to 21,855.70, supported by gains in the industrials, materials and energy sectors, while stocks in the information technology and healthcare – especially cannabis stocks – fell.

South of the border, stock markets stumbled. In New York, the Dow Jones Industrial Average was down 113.36 points to 34,451.23. The S&P 500 index fell 54 points to 4,392.59, while the Nasdaq composite fell 292.51 points to 13,351.08.

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Mike Archibald, vice president and portfolio manager at AGF Investments Inc., said there were economic data releases and earnings results south of the border on Thursday that contributed to market jitters in the states. -United. He added that market segments with momentum continue to be commodities and other defensive sectors as investors seek safety amid the ongoing war in Ukraine, as well as uncertainty surrounding bulls. central bank rates by the US Federal Reserve and other central banks.

“It ties into the two things that are probably most important to investors right now. Number one continues to be inflation, and the other is just a broader category of level macroeconomic uncertainty. superior,” Archibald said.

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Inflation, and its impact on the economy in general, is also a fear for investors in Canada. On Wednesday, the Bank of Canada raised its key interest rate by half a point, the highest amount in more than 20 years, as it warned that further rate hikes were to come amid new forecasts of higher inflation levels.

But because the TSX is more heavily weighted toward commodities, it has outperformed U.S. markets that have a greater number of high-growth, high-risk sectors such as technology, Archibald said.

Crude oil prices reversed an early decline on Thursday and settled up 2.6%, and the TSX/S&P capped energy index closed up 0.99%.

“Things that are correlated to inflation, which are primarily commodities, continue to show great strength,” he said.

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On a price basis, Archibald said, the TSX/S&P index is up about 3% year-to-date, while the S&P 500 index is down about 7%.

“Canada continues to be a huge outperformer year to date,” he said. “I think if you think commodities will stay high at least in the medium term, then I think that streak can probably continue.”

One of the biggest dramas in Thursday’s trading, Archibald said, was the current situation surrounding Tesla founder and CEO Elon Musk and Twitter. Musk offered to buy the social media company for $54.20 per share, two weeks after revealing he had accrued a 9% stake.

Musk criticized Twitter for failing to uphold free speech principles and said in a regulatory filing that it should be turned into a private company. Twitter’s stock fell 1.9% to $44.96, well below Musk’s offer price.

The Canadian dollar was trading at 79.36 cents US on Thursday against 79.32 cents US on Wednesday.

The May crude contract rose US$2.70 to US$106.95 a barrel and the May natural gas contract rose 30 cents US$7.30 per mmBTU.

The June gold contract was down US$9.80 at US$1,974.90 an ounce and the May copper contract was up a penny at US$4.72 per pound.

This report from The Canadian Press was first published on April 14, 2022.

– With files from the Associated Press

Companies in this story: (TSX:GSPTSE, TSX:CADUSDX)

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