TORONTO — The S&P/TSX composite continued its rally Friday, rising more than 120 points and closing above 20,000 points for the first time since late August, while U.S. markets also rose.
The S&P/TSX composite index was up 121.15 points at 20,111.51.
In New York, the Dow Jones industrial average was up 32.49 points at 33,747.86. The S&P 500 index was up 36.56 points at 3,992.93,while the Nasdaq composite was up 209.18 points at 11,323.33
The markets could have pulled back after an incredible rally Thursday that saw the Dow rise by more than 1,200 points and the S&P/TSX gain almost 650 points, but some continued good news is buoying indexes instead, said Angelo Kourkafas, investment strategist at Edward Jones.
For example, China eased some of its COVID-19 restrictions Friday.
“That will help the economic recovery and economic reopening, and that’s why commodity prices are acting positively as well, because China is a major commodity consumer,” he said. “So any news of the country announcing measures to reduce the negative impact of zero COVID policy, that is an incremental positive for the markets.”
Meanwhile, Russians withdrew from Kherson, a potentially positive signal for the war in Ukraine which has contributed to uncertainty for months on end.
The combination of those two good-news stories likely contributed to why the market didn’t pull back from its gains Friday, said Kourkafas.
The Canadian dollar traded for 74.40 cents US, according to XE.com, compared with 74.75 cents US on Thursday.
But the markets are also still rising on the inflation data from Thursday that triggered those gains in the first place, which was lower than expected, prompting optimism that central banks might start to wind down their rate hikes, said Kourkafas.
The gains Friday are being led by tech, he said, and other growth investments that have been sensitive to continued inflation and rising rates.
“We’re talking about big moves that really were triggered by the lower than expected CPI data. So that was the big catalyst today,” said Kourkafas.
He cautioned that one month doesn’t make a trend, but noted that leading indicators like supply chain pressures and used car prices are all pointing to a downward trend for inflation.
“We still think we are in the midst of a bottoming process, but more so U-shaped recovery instead of a V-shaped recovery.”
The December crude oil contract was up US$2.49 at US$88.96 per barrel and the December natural gas contract was down 36 cents at US$6.23 per mmBTU.
The December gold contract was up US$15.70 at US$1,769.40 an ounce and the December copper contract was up 16 cents at US$3.91 a pound.
This report by The Canadian Press was first published Nov. 11, 2022.
Companies in this story: (TSX:GSPTSE, TSX_CADUSD=X)
