TORONTO — Strength in base metal stocks helped boost Canada's main stock index on Tuesday, while U.S. markets also climbed as Americans headed to the polls for election day.
Markets historically do well on election days, and then not as well the rest of the week, said Michael Currie, senior investment adviser at TD Wealth.
Election days are also normally more volatile, he added, and Tuesday was no exception.
“Everyone’s betting on something,” he said. “They really don’t know what’s going to happen. So you’re going to get strong feelings one way or another.”
The three main indexes on Wall St. all gained more than one per cent, with the Nasdaq leading at 1.4 per cent.
The Dow Jones industrial average was up 427.28 points at 42,221.88. The S&P 500 index was up 70.07 points at 5,782.76, while the Nasdaq composite was up 259.19 points at 18,439.17.
The S&P/TSX composite index closed up 131.84 points at 24,387.90.
Neither presidential candidate would be a disaster for markets, said Currie, but investors don’t like uncertainty — one of the biggest concerns, he said, would be that the results are delayed or uncertain.
“They’re almost not as concerned with who wins, as long as somebody wins,” he said.
However, Currie added that investors aren’t only looking at who becomes president, but also at the congressional battles.
“If one person wins, and it's a divided Congress, then most of the stuff they say they're going to do they're not going to be able to do anyway,” he said — a split Congress makes more radical moves by the new president less likely.
“The market doesn't care who wins, as long as somebody wins and the Congress is split. That's what they'd like.”
While the election took investors’ focus Tuesday, earnings continued to roll in on both sides of the border. In Canada, Restaurant Brands International saw its stock slip after it missed analysts’ estimates, while Thomson Reuters had a good day thanks to its involvement in artificial intelligence, said Currie.
In the U.S., software company Palantir Technologies saw its stock price jump after surpassing expectations in its latest report.
“The AI boom is fuelling everything,” said Currie.
Investors also got more economic data, this time showing growth accelerated last month for retailers, transportation companies and other businesses in the U.S. services industries — contrary to economists’ expectations. The report surprised to the upside, said Currie.
The U.S. Federal Reserve is set to announce another interest rate cut Thursday, and Currie said markets are betting on a quarter-percentage-point decrease.
“The economy has shown a little bit of strength, but probably not enough ... to prevent that from happening, he said.
The Canadian dollar traded for 72.18 cents US compared with 71.97 cents US on Monday.
The December crude oil contract was up 52 cents at US$71.99 per barrel and the December natural gas contract was down 11 cents at US$2.67 per mmBTU.
The December gold contract was up US$3.50 at US$2,749.70 an ounce and the December copper contract was up five cents at US$4.48 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Nov. 5, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
