TORONTO — Canada's main stock index posted a small gain to start the week while U.S. markets also rose in the latter half of the afternoon after sagging for most of the day.
Monday was a benign trading day with investors in “wait and see” mode, said Kevin Headland, chief investment strategist at Manulife Investment Management.
“We’re kind of still digesting the information from last week,” he said.
The S&P/TSX composite index was up 62.06 points at 20,641.97.
In New York, the Dow Jones industrial average was up 100.71 points at 33,987.18. The S&P 500 index was up 13.68 points at 4,151.32, while the Nasdaq composite was up 34.26 points at 12,157.72.
In Canada, investors are waiting for fresh inflation data to be released Tuesday, Headland said.
After last week’s rate decision by the Bank of Canada saw the central bank hold its key interest rate at 4.5 per cent, all eyes will be on key economic figures to see whether any more hikes could be in the cards, he said.
The Bank of Canada has made sure to set expectations that there is still potential for another hike if inflation doesn’t cool fast enough, Headland said.
Similarly, investors are also waiting for more economic data in the U.S. to help guide expectations about the Federal Reserve’s next move, Headland said.
“There's a lot of economic data that's coming out over the next couple weeks in anticipation of the Fed rate meeting,” he said.
“I think we're getting closer to the pause. And perhaps we're seeing (the) beginning of initial uncertainty in the U.S. economic landscape.”
Meanwhile, U.S. earnings season began on a positive note Friday, with several major banks reporting earnings above expectations.
This season, investors will be paying close attention to companies’ guidance as they move slowly away from a macro focus and more to individual firms to see how their fundamentals weather an economic slowdown, said Headland.
The Canadian dollar traded for 74.64 cents US compared with 74.84 cents US on Friday.
Oil prices are still trying to find their balance as they adjust to the recent announcement by OPEC plus of production cuts, said Headland.
"I think it remains in a fairly tight trading range for the near term, again, as we still are digesting some of the potential weakness in the North American economy. And that could impact some demand going forward."
The June crude contract was down US$1.60 cents at US$80.83 per barreland the May natural gas contract was up 16 cents at US$2.28 per mmBTU.
The June gold contract was down US$8.80 at US$2,007.00 an ounceand the May copper contract was down four cents at US$4.07 a pound.
This report by The Canadian Press was first published April 17, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
