TORONTO – Canada’s main stock index continued to rise Thursday, boosted by gains in energy stocks, while U.S. stock markets moved lower with the post-election rally appearing to be in the rearview mirror.
The S&P/TSX composite index closed up 60.65 points at 25,049.67.
In New York, the Dow Jones industrial average was down 207.33 points at 43,750.86. The S&P 500 index was down 36.21 points at 5,949.17, while the Nasdaq composite was down 123.07 points at 19,107.65.
“I think that the market is very much still trying to figure out where to settle post-election,” said Tamsin Wilding, principal and portfolio manager for fixed income at Leith Wheeler Investment Counsel Ltd.
“There’s a lot of uncertainty still overhanging the market,” she said, and that’s reflected in the higher level of volatility.
Investors are waiting for clarity on president-elect Donald Trump’s economic agenda, said Wilding, to see whether promises of tariffs, deregulation and immigration changes will become reality.
Some of these policies are expected to be inflationary, but could also dampen economic growth, she said.
Over the past month, there’s been a “dramatic” change in how markets are pricing in future interest rate moves from the U.S. Federal Reserve as a result of Trump’s election, said Wilding.
“We’ve got a much more shallow easing cycle, and we’ve got a higher terminal rate,” she said.
In recent months, markets and the U.S. central bank had become more focused on economic data like labour markets rather than inflation as investors tried to price in the Fed’s next move, said Wilding. But she said that post-election, “there is more of a sensitivity, or a renewed sensitivity, to inflation data that we’re seeing from the market.”
U.S. wholesale inflation accelerated in October, coming in at 2.4 per cent from 1.9 per cent in September.
“There’s nothing within that data that takes a December Fed cut off the table,” said Wilding.
But she expects more wariness going forward as the central bank looks for signs that progress on inflation could be stalling, “especially if we have these inflationary forces that can come down the pipeline in the next 12 to 24 months on the back of a Trump agenda.”
Fed chair Jerome Powell spoke Thursday in Dallas, saying the central bank is approaching its decisions carefully.
“The economy is not sending any signals that we need to be in a hurry to lower rates,” he said.
The Canadian dollar traded for 71.29 cents UScompared with 71.53 cents US on Wednesday.
The December crude oil contract was up 27 cents at US$68.70 per barrel and the December natural gas contract was down 19 cents at US$2.89 per mmBTU.
The December gold contract was down US$13.60 at US$2,572.90 an ounce and the December copper contract was up a penny at US$4.09 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Nov. 14, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
