S&P/TSX composite gains 200 points Tuesday, U.S. markets also up
TORONTO – Canada’s main stock index gained nearly 200 points on Tuesday with broad-based strength across all sectors, while U.S. markets also rose, erasing Monday’s losses. The S&P/TSX composite index rose 195.27 points to 20,767.38.
TORONTO – Canada’s main stock index gained nearly 200 points on Tuesday with broad-based strength across all sectors, while U.S. markets also rose, erasing Monday’s losses.
The S&P/TSX composite index rose 195.27 points to 20,767.38.
January appeared to end on cautious optimism, reflecting the month’s overall trend, said Stephen Duench, vice president and portfolio manager of AGF Investments Inc.
“I believe that most of today’s power is really just… sort of a continuation of what we’ve seen about trends to start 2023.”
In New York, the Dow Jones Industrial Average rose 368.95 points, or more than one percent, to 34,086.04. The S&P 500 index rose 58.83 points, or nearly 1.5 percent, to 4,076.60, while the Nasdaq Composite rose 190.74 points, or nearly 1.7 percent, to 11,584.55.
It’s been a great month for the companies and sectors that didn’t fare well last year, such as technology, Duench noted — the Nasdaq is up nearly 11 percent for the month, while the Dow is up nearly 3 percent and the S&P 500 is up more than six percent.
New data on Tuesday showed Canada’s GDP growth slowing in the fourth quarter of 2022, with economists saying it was evidence that rate hikes are starting to have an impact.
And in the US, a report showed that growth in workers’ wages and benefits slowed in late 2022.
With economic data showing a slowdown in inflation, there is more hope than a month ago for a soft landing as central banks end their rate-hiking cycles, he said.
That hope isn’t fully priced in yet, but the tone has definitely changed, Duench said.
The Federal Reserve is widely expected to hike interest rates by another 25 basis points on Wednesday, although 50 basis points are not ruled out, Duench said. Investors will be watching the central bank’s comments for signs that it is preparing to pause its rate hikes.
But the Fed probably won’t be as clear-cut this time as the Bank of Canada was last week, Duench said.
“I think it would be surprising…if they came up with moderate rhetoric tomorrow.”
The Canadian dollar was trading at 74.91 US cents, compared to 74.87 US cents on Monday.
The March crude oil contract rose 97 cents to $78.87 a barrel and the March natural gas contract rose a cent to $2.68 a mmBTU.
The April gold contract rose $6.10 to $1,945.30 an ounce and the March copper contract rose two cents to $4.23 a pound.
This report from The Canadian Press was first published on January 31, 2023.
Company in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press