S&P/TSX composite index closes up, U.S. markets also higher after choppy day
Written by The Canadian Press on September 19, 2022
TORONTO — Canada’s main stock index closed up Monday on fairly broad-based gains while U.S. stock markets closed higher after choppy trading ahead of Wednesday’s Federal Reserve rate decision.
The S&P/TSX composite index closed up 176.50 points at 19,562.38 with commodity-based stocks especially gaining after showing some respite for recent downward pressure, said Paul Harris, portfolio manager at Harris Douglas Asset Management.
“There’s been a big pullback in some of these areas, and now they’re sort of bouncing a little bit,” he said.
The base metal index climbed about three per cent as First Quantum Minerals Ltd. gained four per cent and Teck Resources Ltd. was up 3.7 per cent. Gold stock also traded higher, including an almost 11 per cent gain for Kinross Gold Corp. after it announced a boost to its share buyback program.
Energy stocks were also helping to push up the market as the November crude contract closed up 60 cents at US$85.36 per barrel and the October natural gas contract was up a penny at US$7.75 per mmBTU.
“I think oil’s really making a difference and that’s what’s really pushing up the stocks in the Canadian market,” said Harris.
The commodity gains might be short-lived, said Harris, as rising rates and recessionary concerns are putting pressure on such cyclical sectors.
The latest indicator of where rates are going comes Wednesday when the U.S. Federal Reserve is set to release its latest rate decision and accompanying commentary. The pending decision comes after higher-than expected inflation data out of the U.S. last week, while Canadian inflation data is set to come out Tuesday.
Uncertainty over how far the fed will go, and what kind of hints it will give for the months ahead, made for choppy trading with U.S. markets that swung between losses and gains.
Markets in the end closed up, with the Dow Jones industrial average ending up 197.26 points at 31,019.68. The S&P 500 index was up 26.56 points at 3,899.89, while the Nasdaq composite was up 86.62 points at 11,535.02.
Expectations of a coming rate hike in the U.S., and some softening data on Canadian unemployment, has put pressure on the loonie, though the Canadian dollar traded for 75.26 cents US Monday, down only slightly from the 75.27 cents US on Friday.
The loonie was trading above 78 cents US in August, and above 77 cents US at the start of last week, but falling oil prices, and especially the strengthening U.S. dollar has cut it down, said Harris.
“The Canadian dollar is in a tough situation because U.S. rates are going up, so that’s helped the U.S. dollar. I think it’s more U.S. dollar strength as opposed to Canadian dollar weakness.”
The December gold contract was down US$5.30 at US$1,678.20 an ounce and the December copper contract was down half a penny at US$3.51 a pound.
This report by The Canadian Press was first published Sept. 19, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
The Canadian Press