“S&P/TSX Composite Rises Over 100 Points as US Markets Gain Following Fed Speech”
TORONTO – Canada’s main stock index rose nearly 100 points on Tuesday as strong performance in the energy sector was dragged down by losses in telecoms and utilities, while U.S. markets also rose.
The S&P/TSX composite index rose 96.08 points to 20,725.00.
In New York, the Dow Jones Industrial Average rose 265.67 points to 34,156.69. The S&P 500 Index rose 52.92 points, or 1.3 percent, to 4,164, while the Nasdaq Composite rose 226.34 points, or 1.9 percent, to 12,113.79.
Markets wobbled on Tuesday, then rose for the latter half of the afternoon in response to comments from Federal Reserve Chair Jerome Powell, said Allan Small, chief investment adviser at iA Private Wealth.
Powell reiterated that inflation will take time to moderate as the job market remains strong, but also said he believes inflation will fall significantly this year.
After an early afternoon surge and subsequent slump, markets rebounded to end the day, more than erasing Monday’s losses.
“It just seems like this market is dying to continue this investment in recovery,” Small said.
Markets tend to take the path of least resistance, which is currently sloping up, Small said.
Although markets have priced in rate cuts later in 2023 and a recent Bank of Canada poll showed many Bay Street analysts are expecting those cuts, Bank of Canada Governor Tiff Macklem reiterated in his message on Tuesday that the Central bank paused and not pivoted.
He said the bank had halted its rate hikes to see if it had raised enough to bring inflation to its target level.
Small said only time will tell if central banks cut rates this year as they grapple with many economic uncertainties later this year. Macklem acknowledged that uncertainty in his speech in Quebec City on Tuesday, saying if inflation doesn’t cool further as expected, the bank will have to raise rates further.
The Canadian dollar was trading at 74.43 US cents, compared to 74.39 US cents on Monday.
The TSX energy index rose 2.78 percent on Tuesday as oil prices rose.
The March crude oil contract rose $3.03 to $77.14 a barrel and the March natural gas contract rose 13 cents to $2.58 a mmBTU.
The April gold contract rose $5.30 to $1,884.80 an ounce and the March copper contract rose 5 cents to $4.08 a pound.
This report from The Canadian Press was first published on February 7, 2023.
Company in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
Source: www.orilliamatters.com
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