U.S. stocks rose in thin volume as investors held onto hopes for an easing of the trade war, while Treasuries advanced ahead of a meeting of central bankers later this week. Canadian stocks were nearly unchanged, but also ended in the green with the help of rallying pot stocks.
The S&P 500 Index advanced for a third day, led by companies in the consumer-discretionary and industrials sectors. The U.S. dollar dropped after President Donald Trump said he had expected Jerome Powell to be a cheap-money Federal Reserve chairman. The 10-year Treasury yield declined to the lowest level in six weeks after Jeffrey Gundlach warned of a short squeeze.
“Investors sentiment is on the bullish side, with investors figuring new all-time highs are just around the corner, especially if trade talks get going with China,” Paul Nolte, a portfolio manager at Kingsview Asset Management, wrote in a note to clients. “Another hot late summer week on Wall Street and trading levels should be relatively low. The path of least resistance now is higher, but as we have seen, news flow is important.”
Markets appear to be striking a more optimistic tone after talks between the world’s biggest economies on trade made their way back onto the agenda. Meanwhile, investors will be closely watching this week’s Jackson Hole symposium for clues on monetary policy, and to see whether central bankers can do anything to help bring back stability after the recent bout of emerging market-led volatility.
Elsewhere, the lira slipped for a second day. Turkish markets are closed for most of this week, which may mean low trading volumes and sharper currency swings than usual. Emerging-market stocks and currencies rose. The onshore yuan climbed amid signs China is propping up the currency.
The S&P 500 Index climbed 0.2 percent to 2,857.06 as of 4 p.m. New York time. The Stoxx Europe 600 Index advanced 0.6 percent. The MSCI All-Country World Index increased 0.5 percent. The MSCI Emerging Market Index gained 1.2 percent, the biggest gain in nearly a month.
Canada
The S&P/TSX Composite Index closed up 7.32 points, or 0.04 per cent, at 16,331.03.
Investors are continuing to treat spirits company Constellation Brands Inc.’s big bet on the cannabis sector as a watershed moment, driving shares of many big players higher Monday.
The big beneficiary was Canopy Growth Corp., recipient of the US$4 billion investment from Constellation, announced Wednesday. While investors have punished Constellation, sending its shares down roughly 10 per cent on the news, Canopy gained 11 per cent just in Monday’s trading and hit an all-time high of $49.14. Canopy has gained roughly 50 per cent since the news broke.
Also on Monday, Aurora Cannabis Inc. ended up 17 per cent; Aphria Inc. was up 7 per cent. The Horizons Marijuana Life Sciences ETF also added 7 per cent
Reuters with files from Bloomberg News and The Globe and Mail