TORONTO – Canada’s main stock index ended its best quarter in more than a decade as the price of gold reached its highest level since 2011.
The S&P/TSX composite index closed up 125.50 points at 15,515.22 to finish 2.1 per cent higher in June and ahead nearly 16 per cent over the last three months.
The unprecedented gains follow a disastrous March, which still leaves the Toronto stock market about nine per cent down for the year.
“It’s obviously been a tumultuous quarter to say the least,” said Allan Small, senior investment adviser at HollisWealth.
“I think most people came into this quarter coming out of March afraid, nervous, feeling as though they couldn’t see the light at the end of the tunnel. And I think we’re leaving this quarter with a lot more optimism.”
Small said he went into Tuesday’s session before the Canada Day holiday skeptical about the outcome after last week’s pullback as infection rates surged in several southern and western states.
Unlike initial infections, however, the latest increases haven’t been accompanied by as many hospitalizations and deaths.
Stock markets have swung wildly with the impact of the COVID-19 pandemic that’s caused mass lockdowns, high unemployment and extensive fiscal and monetary stimulus.
In New York, the Dow Jones industrial average was up 217.08 points at 25,812.88 as it ended its best quarter since 1987. The S&P 500 index was up 47.05 points at 3,100.29, while the Nasdaq composite was up 184.61 points at 10,083.64, a record close.
The partial market recovery has exposed a disconnect within the economy which continues to struggle as reopenings are staggered and constrained to prevent new infections.
The stock market gains came amid strong consumer confidence numbers and Congressional testimony by Federal Reserve chairman Jerome Powell.
He said the economic outlook remains uncertain with output and employment still far below their pre-pandemic levels.
“A full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities,” he said, adding that all levels of government need to provide relief to support the recovery for as long as needed.
Investors in the market drop have been rewarded, while those who were scared onto the sidelines have been left behind, suggested HollisWealth senior investment adviser Small.
He expects stock markets will move in fits and starts depending on virus headlines, but tread higher in the third quarter and surge into the final months of 2020.
“I think the market is looking to the end of the year, and that’s why you’re seeing the gains today,” he said in an interview.
“(It’s) kind of bringing forward a lot of what we’re going to see in the fall and into the start of the winter.”
The materials sector gained more than two per cent on higher gold prices to lead the TSX. Iamgold Corp. and Hudbay Minerals Inc. rose 7.8 and 7.3 per cent respectively.
The August gold contract was up US$19.30 at US$1,800.50 an ounce and the September copper contract was up 3.6 cents at nearly US$2.73 a pound.
Industrials increased nearly one percentage point even though shares of Air Canada lost another three per cent.
The heavyweight financials sector was up 0.8 per cent.
Energy was one of four major sectors to fall as Tourmaline Oil Corp. dropped 3.5 per cent and Seven Generations Energy Ltd. was down 2.6 per cent on lower crude oil prices.
The August crude contract slid back 43 cents at US$39.27 per barrel and the August natural gas contract was up 4.2 cents at US$1.75 per mmBTU.
The Canadian dollar traded for 73.38 cents US compared with 73.09 cents US on Monday.
This report by The Canadian Press was first published June 30, 2020.
Why Canadian investors can fall behind by staying at home – BNN
The year is half over and global equity markets have recovered most of the losses caused by the unprecedented shutdown of the global economy.
That’s the good news. As we enter the second half of 2020, the COVID-19 pandemic is far from under control, the threat of another economic freeze is real, and this year’s gains are tenuous.
And for Canadian investors with too much Canada in their portfolios, it’s a longer climb to break even for the year.
The murky outlook has many long-term investors saving for retirement in a holding pattern until the corporate world can accurately forecast earnings. If their portfolios are properly diversified gains from the good companies, geographic regions and sectors should more than compensate for losses in weaker areas over time.
In the meantime, mid-year is a great opportunity to see how your portfolio is stacking up against the markets and to appreciate the importance of managing risk through diversification. If performance is lacking it might be time to make some tweaks.
Even after a remarkable second quarter, the S&P/TSX Composite Index is down nearly ten per cent so far this year. The global economic freeze, combined with a crash in crude oil prices hit the resource-heavy Canadian stock market hard. Energy-related stocks are still at about half their value since the beginning of 2020. Canadian financials, which include the big banks and insurance companies, helped stem the loss but are still down almost 20 per cent from the start of the year. Many stocks and sectors helped buoy the TSX but when two-thirds of all stocks are either financials or resource related, there aren’t many places to hide.
Canadian-listed stocks account for less than three per cent of publicly-traded stocks globally. In comparison, U.S. stocks account for about half and are much better diversified by sector and geography. Many of the companies listed in the U.S. have a global reach, which gives Canadians easy access to the world through our southern neighbours.
Like the TSX, the blue-chip heavy Dow Jones Industrial Average is down about ten per cent and the more globally diversified S&P 500 has managed to keep year-to-date losses at three per cent.
However, the technology-heavy Nasdaq Composite is actually posting a gain of almost 14 per cent as investors bet stocks like Apple Inc., Microsoft Corp., Facebook Inc., Amazon.com, Netflix Inc. and Google parent Alphabet Inc. will continue to thrive under the threat of pandemic.
Canadians who got global exposure in Canadian dollars took a slight hit on a loonie that has slipped since the start of the year (73 cents to the U.S. dollar from 77 cents) but Canadians trading in U.S. dollars got an additional boost when you convert to Canadian dollars.
Regardless of the currency, many globally-focused Canadian portfolios are getting some relief from emerging markets including China, India and Brazil. The MSCI Emerging Markets Index has managed to hold year-to-date losses at five per cent after plunging more than thirty per cent in March due to the added strain of U.S.-China tensions.
It’s not easy for the average investor to outperform the broader markets, but a properly diversified portfolio should at least reflect them. If your portfolio returns are looking too much like the TSX and not enough like the rest of the world, it might be time to let your money venture beyond our borders.
Facebook Advertising Exodus Could Benefit Smaller Businesses, says Local Entrepreneur – VOCM
Large international advertisers are fleeing the Facebook platform in light of the Black Lives Matter and the Stop Hate for Profit movements. While the impact on Facebook has been significant in terms of advertising dollars, it’s doubtful large companies will abandon the platform altogether.
That’s according to Terry Hussey of Vigilant Management, who is skeptical about the reason why big advertisers are leaving Facebook.
He says a lot of corporations were about to slash their advertising budgets anyway due to the economic devastation wrought by COVID-19.
Josh Taylor of txtsquad says larger advertisers leaving the platform is good news for smaller and medium-sized businesses that rely on social media to serve their customer base, but he doesn’t believe the big advertisers can skip Facebook completely. He says while there are some real challenges related to the social media platform, he calls it a “workhorse” that has defied predictions that it is on the way out.
Facebook losing the boycott battle
As an advertising boycott of Facebook continues to grow, Mark Zuckerberg shows no sign of backing down.
The campaign, involving some of the world’s biggest companies, calls on Facebook to do more about hate speech and misinformation.
Facebook boss Mr Zuckerberg says he thinks the brands will be back “soon enough” and that Facebook’s policies won’t change. It’s a story that cuts to the heart of how the internet interacts with democracy, freedom of speech, business and how we define truth and hate.
In the latest of his weekly reports, this is Ros Atkins on Facebook and the boycott.
Canada, U.S. excluded from Britain's new quarantine-free travel list – CTV News
Washington Redskins undergoing 'thorough review' of team name – CBC.ca
Full buck moon with a lunar eclipse visible this weekend – BC News – Castanet.net
Iran anticipates renewed protests amid social media shutdown
Silver investment demand jumped 12% in 2019 – report – MINING.com
Richmond BBQ spot speaks out about coronavirus rumours Vancouver Is Awesome
- Science16 hours ago
‘Very little risk’ that pets can infect owners with COVID-19
- Tech18 hours ago
Captain America is now in Fortnite – The Verge
- Health19 hours ago
More COVID-19 cases linked to 3rd Kingston-area nail salon – CBC.ca
- News20 hours ago
WE Charity saw resignations, departures from senior ranks before landing government contract – CBC.ca
- Tech15 hours ago
Captain America Takes A Break From The Avengers To Play Some Fortnite – Nintendo Life
- Sports12 hours ago
Ryan Kesler chirps Oilers fans after ripping Edmonton | Offside – Daily Hive
- Health14 hours ago
Moderna executives cashing in on COVID-19 vaccine stock speculation – The Globe and Mail
- Sports23 hours ago
NHL Would Outsmart NBA, MLB, NFL By Restarting Season Outside United States – Forbes