TORONTO – Canada’s main stock index gained more than 200 points Thursday, led higher by technology and base metals, while U.S. stock markets were mixed.
Markets largely continued their post-election rally after Republican candidate Donald Trump won a decisive victory, though the Dow — which gained more than three per cent Wednesday — was essentially flat to end Thursday trading.
Investors are pricing in the pro-growth and inflationary environment expected from Trump’s promised policies, such as sweeping tariffs, said Brian Madden, chief investment officer with First Avenue Investment Counsel.
“Yesterday broke records for trading volume, and today we’re having very much above average trading volumes in Canada and the U.S. again,” he said.
The S&P/TSX composite index closed up 208.48 points at 24,845.93.
In New York, the Dow Jones industrial average was down 0.59 points at 43,729.34. The S&P 500 index was up 44.06 points at 5,973.10, while the Nasdaq composite was up 285.99 points at 19,269.46.
The U.S. Federal Reserve cut its key interest rate by a quarter of a percentage point Thursday, as expected, with chair Jerome Powell maintaining that in the near term, the election won’t change the central bank’s plans for its policy.
“They’re being tight-lipped about it, and sensibly so, because campaign promises aren’t enacted legislation,” said Madden.
There is concern that some of Trump’s policies could be inflationary, and Madden noted that markets are already betting on what that could mean for interest rates.
“If you’re enacting tariffs and pressing hard on the accelerator and creating job shortages and scarcity and wage inflation by running the economy hot, then the Fed won’t necessarily have as much license to cut rates as soon or as deeply as they would otherwise,” he said.
It was a big day for earnings in Canada, with companies including Bombardier, BCE, Canada Goose, Nutrien and others reporting.
Madden said much like the economy, Canadian earnings growth is lagging U.S. earnings growth.
But there are some bright spots, he said, such as TC Energy and Manulife, which both posted strong reports Thursday.
Overall, he said investors are glad to have clarity from the election.
“It should pave the way … for a continuation of this ongoing, very strong cyclical bull market,” said Madden.
Heading into December, which he said is seasonally the strongest month of the year, “it’s looking good here.”
The Canadian dollar traded for 72.12 cents US compared with 71.76 cents US on Wednesday.
The December crude oil contract was up 67 cents at US$72.36 per barrel and the December natural gas contract was down six cents at US$2.69 per mmBTU.
The December gold contract was up US$29.50 at US$2,705.80 an ounce and the December copper contract was up 18 cents at US$4.43 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Nov. 7, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
