TORONTO – Canada’s main stock index moved higher Friday, helped by gains in base metal stocks, while U.S. stock markets also rose moderately, marking the end of a volatile trading week.
The S&P/TSX composite index closed up 85.69 points at 22,311.30.
In New York, the Dow Jones industrial average was up 51.05 points at 39,497.54. The S&P 500 index was up 24.85 points at 5,344.16, while the Nasdaq composite was up 85.28 points at 16,745.30.
After a roller-coaster of a week, “sometimes boring is good,” said Macan Nia, co-chief investment strategist at Manulife Investment Management.
Friday saw continued optimism from the day before as more data on employment helped bring some relief on the U.S. economy.
A jobs report last week had helped spark concern among investors that bad economic news was no longer good news for interest rates, but just plain old bad news, said Nia. That was one of the main factors in Monday’s sell-off, he said.
U.S. markets ended the week just marginally down from where they started it after a Thursday rally helped the indexes regain much of what they lost on Monday.
The narrative that bad economic news could be something to worry about instead of just more proof rate cuts are coming is likely to continue through August, Nia said — and he expects volatility to continue as well.
“Yes, economic data is trending lower, but an imminent recession or material slowdown is probably not in the cards,” he said. “There’s still resiliency in the U.S. economy.”
Over the past week or so, market expectations for rate cuts in the U.S. have changed, noted Nia, from one 25-basis-point cut in September to 50 basis points, but he thinks that’s too optimistic.
“Over the last 10 days, (that’s) changed dramatically,” he said.
In Canada on Friday, the latest employment report showed the economy lost 2,800 jobs in May, while the unemployment rate remained at a 30-month high of 6.4 per cent.
“It just is further evidence for the Bank of Canada that the Canadian economy is slowing, and it gives them the backdrop to continue cutting rates as we go throughout the second half of the year,” said Nia.
The Canadian dollar traded for 72.82 cents US compared with 72.76 cents US on Thursday.
The September crude oil contract was up 65 cents at US$76.84 per barrel and the September natural gas contract was up a penny at US$2.14 per mmBTU.
The December gold contract was up US$10.10 at US$2,473.40 an ounce and the September copper contract was up three cents at US$3.99 a pound.
This report by The Canadian Press was first published Aug. 9, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
