TORONTO — Canada’s main stock index rose Tuesday, while U.S. markets were also up, though indexes on both sides of the border closed down slightly from late-morning highs.
The S&P/TSX composite index was up 72.97 points at 19,994.78.
In New York, the Dow Jones industrial average was up 56.22 points at 33,592.92. The S&P 500 index was up 34.48 points at 3,991.73, while the Nasdaq composite was up 162.19 points at 11,358.41.
Markets are reacting to several pieces of incrementally positive news Tuesday, said Lesley Marks, chief investment officer of equity at Mackenzie Investments.
The day started off with strong earnings from Walmart, which helped investors gauge consumer health, she said.
The retail giant listed its sales and profit forecast Tuesday and announced a share buyback plan.
“That was kind of how the day started. And that set an overall positive tone for the consumer sectors, and gave people a bit of a sense of relief from something that would be viewed as a bellwether in gauging the temperature of consumers,” she said.
In the U.S., the producer price index echoed last week’s lower-than-expected ease in inflation, buoying optimism that the Fed will ease its future interest rate hikes, said Marks.
Tech stocks are responding to optimism about interest rates, which have been the catalyst for their underperformance, said Marks, which is why the Nasdaq outperformed other indexes Tuesday.
In Canada, housing data showed the monthly chain of price declines was slowing, but Marks cautioned that the data should be taken with a grain of salt.
“It’s hard to think that housing in Canada is out of the woods, given the context of where we currently are in interest rates,” she said.
Inflation data in Canada comes out Wednesday, and Marks expects to see the belief that inflation has peaked in Canada reinforced.
“Canada has been in a little bit of a different situation than the U.S.,” she said. “The data we saw last week was really the first indication of a rollover in inflation in the U.S. And that’s not been the case in Canada, we’ve already seen an indication that prices are coming down.”
The Canadian dollar traded for 75.24 cents US compared with 75.26 cents US on Monday.
The December crude contract was up US$1.05 at US$86.92 per barrel and the December natural gas contract was up 10 cents at US$6.03 per mmBTU.
Oil prices are being driven by two things, said Marks: broader expectations that interest rate growth will slow, and further optimism about China loosening its COVID policies.
“That will create a nice tailwind for oil prices … and that’s good for Canadian stocks,” she said.
The December gold contract was down 10 cents at US$1,776.80 an ounceand the December copper contract was down one cent at US$3.82 a pound.
This report by The Canadian Press was first published Nov. 15, 2022.
Companies in this story: (TSX:GSPTSE, TSX_CADUSD=X)
