TORONTO – Canada’s main stock index posted another day of steady gains Friday as strength in base metals outweighed weakness in energy and industrial stocks, while U.S. markets also rose.
Equities ended the week on a good note as more earnings rolled in south of the border and Canadian investors braced for another interest rate cut, said Adelaide Chiu, portfolio manager, vice-president and head of responsible investing at NEI Investments.
“I think that’s all very positive for the markets today,” she said.
In New York, the Dow Jones and the S&P 500 both set new all-time highs on Friday. It was the sixth straight winning week for the S&P 500, its longest streak so far this year.
The Dow Jones industrial average was up 36.86 points at 43,275.91. The S&P 500 index was up 23.20 points at 5,864.67, while the Nasdaq composite was up 115.94 points at 18,489.55.
The S&P/TSX composite index gained 132.06 points at 24,822.54.
The Bank of Canada is set to cut for a fourth time next week, said Chiu, as recent inflation reports in both Canada and the U.S. came in lower than expected.
Currently the market is betting on a larger half-percentage-point cut, said Chiu.
“It is reasonable considering where inflation has come,” she said.
The Bank of Canada has cut three times this year, but all were more measured quarter-point cuts.
The most recent report on inflation in Canada showed it slowed to 1.6 per cent in September, below economists’ expectations.
Several notable U.S. companies released earnings on Friday, including American Express, which reported stronger profits than expected, though its revenue fell short and its stock fell more than three per cent.
Netflix reported after the bell on Thursday, beating profit expectations, and its stock rose more than 11 per cent.
Despite largely positive earnings reports so far this season, Chiu said investors will be keeping an eye on the consumer as earnings continue, looking for signs of softness.
The hype around artificial intelligence that drove a narrow, tech-focused rally in the first half of the year has moderated somewhat, said Chiu.
“You’re seeing the rest of the market now also showing valuation gains over the past few quarters,” she said.
With the U.S. election less than weeks away, Chiu added that investors are bracing for some volatility.
“I think right now … there’s a lot of talk about how to position yourself for the U.S. election,” she said.
The Canadian dollar traded for 72.45 cents US compared with 72.52 cents US on Thursday.
The December crude oil contract was down US$1.40 at US$68.69 per barrel and the November natural gas contract was down nine cents at US$2.26 per mmBTU.
The December gold contract was up US$22.50 at US$2,730 an ounceand the December copper contract was up five cents at US$4.38 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Oct. 18, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
