Canada’s main stock index rose on Monday to its highest closing level in nearly four weeks as investors snapped up stocks in some of the most depressed sectors of the market amid hopes that central banks would ease the pace of interest rate hikes.
The S&P/TSX Composite Index ended up 42.56 points, or 0.2%, at 19,857.07, its highest closing level since Dec. 14.
“Market moves on a day-to-day basis are very much being dictated by the inflation picture and central bank actions. That has not changed (from 2022),” said Elvis Picardo, portfolio manager at Luft Financial, iA Private Wealth.
The U.S. benchmark S&P 500 index closed barely changed as expectations that the Federal Reserve will become less aggressive with its interest rate hikes were offset by lingering worries about inflation.
“It does seem like, even though market participants are braced for a recession, the tone, at least for the first few days of this year, has been encouraging,” Picardo said. “We are seeing some buying come back into the beaten-down groups like technology.”
The Toronto market’s technology sector lost 35.7% in 2022. It was up nearly 1% on Monday, while energy gained 0.6% as oil settled 1.2% higher at US$74.63 a barrel. Oil rose after China reopened its borders, boosting the outlook for fuel demand.
A standout among individual names was financial services firm Canaccord Genuity Group Inc. Its shares soared 29.5% after a group led by the company’s management said it would launch a takeover bid at nearly C$1.13 billion..
Cannabis producer Tilray Brands Inc was one of the laggards. Its shares fell 8.1% after the company reported a second-quarter loss.
Investors are awaiting comments Tuesday from Fed Chair Jerome Powell, who some strategists expect could say more time is needed to show inflation is under control.
Money market bets were showing 77% odds of a 25-basis point hike in the Fed’s February policy meeting.
A U.S. consumer prices report due Thursday could be key for rate expectations, said Quincy Krosby, chief global strategist, LPL Financial in Charlotte, North Carolina. “The CPI report this week is going to be essential for fine-tuning the Fed funds futures market.”
S&P 500 companies are about to kick off the fourth-quarter earnings period, with results from top U.S. banks expected to start later this week.
The Dow Jones Industrial Average fell 112.96 points, or 0.34%, to 33,517.65, the S&P 500 lost 2.99 points, or 0.08%, to 3,892.09 and the Nasdaq Composite added 66.36 points, or 0.63%, to 10,635.65.
Shares of Broadcom Inc fell in late trading to end down 2% after Bloomberg, citing people familiar with the matter, reported that Apple Inc plans to drop a Broadcom chip in 2025 and use an in-house design instead.
Tesla Inc shares rose 5.9% after the electric-vehicle maker indicated longer waiting times for some versions of the Model Y in China, signaling the recent price cuts could be stoking demand.
Macy’s Inc fell 7.7% and Lululemon Athletica Inc dropped 9.3% after both retailers issued disappointing holiday-quarter forecasts.
Volume on U.S. exchanges was 11.35 billion shares, compared with the 10.90 billion average for the full session over the last 20 trading days. Advancing issues outnumbered decliners on the NYSE by a 1.85-to-1 ratio; on Nasdaq, a 1.48-to-1 ratio favored advancers. The S&P 500 posted 13 new 52-week highs and two new lows; the Nasdaq Composite recorded 129 new highs and 32 new lows.
Reuters, Globe staff
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