TORONTO — Canada's main stock index rose on Wednesday, helped by strength in base metals and technology, while U.S. stock markets also climbed after a mix of retail earnings, economic data and insight into central bank deliberations over interest rates.
The S&P/TSX composite index closed up 84.29 points at 23,121.73.
In New York, the Dow Jones industrial average was up 55.52 points at 40,890.49. The S&P 500 index was up 23.73 points at 5,620.85, while the Nasdaq composite was up 102.05 points at 17,918.99.
“At the moment, we are seeing the hypersensitivity of the market to labour data on full display,” said Tamsin Wilding, principal and portfolio manager for fixed income at Leith Wheeler Investment Counsel Ltd.
The U.S. government released a preliminary revision suggesting the economy created 818,000 fewer jobs in the year through March than earlier reported — a smaller gap than some had feared.
Markets were “quite jumpy” before the revisions came out, because labour market data is likely going to dictate the interest-rate easing pathway for the U.S. Federal Reserve, said Wilding.
“They’re laser-focused on anything that shows a downside risk to growth of that labour market, and something that’s more severe than the gradual rebalancing that the Fed has assessed the labour market at.”
However, the data came in consistent with estimates, said Wilding.
Strong earnings from some large retail companies in the U.S. reinforced recent retail sales data, with Target and TJX both topping expectations. Target’s share price rose more than 11 per cent while TJX gained more than six per cent.
The Fed also released the minutes from its last interest-rate decision, which showed most officials in July agreed a cut in September was likely as long as inflation continued to cool.
The minutes reinforced the market’s expectation of a cut next month, said Wilding.
Now, markets are waiting for this weekend’s Jackson Hole symposium as well as further information on the labour market, said Wilding.
“The markets are on edge” over the labour market, she said — where before inflation was the biggest risk, that’s shifted to the labour market data and worries about deterioration there.
But she thinks it’s unlikely the Fed would cut its key rate by half a percentage point as some market watchers are betting on.
The Canadian dollar traded for 73.57 cents US compared with 73.38 cents US on Tuesday.
The October crude oil contract was down US$1.24 at US$71.93 per barrel and the September natural gas contract was down two cents at US$2.18 per mmBTU.
The December gold contract was down US$3.10 at US$2,547.50 an ounce and the September copper contract was up three cents at US$4.19 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Aug. 21, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
