North American stock markets climb on optimism about economic re-openings

North American stock markets climb on optimism about economic re-openings

TORONTO — North American stock markets moved higher midweek on optimism surrounding economic reopenings following a two-month lockdown.

Investor sentiment also drove up crude oil prices again which helped to support the Toronto stock market.

“Markets are in full-on risk-on mode today,” said Candice Bangsund, portfolio manager for Fiera Capital.

The S&P/TSX composite index closed up 112.15 points at 14,997.63, after playing catch up for a strong rally in the U.S. on Victoria Day Monday.

U.S. markets recovered Wednesday, a day after losing ground on concerns about the viability of a potential vaccine for COVID-19.

“Investors have shifted their focus away from disappointing news on a potential (COVID-19) vaccine, and today are focusing on further easing of restrictions and the gradual reopening of the economy all of which has boosted appetite for risky assets across the board,” she said.

There’s a tug-of-war between the hopes for a viable therapeutic to stem the pandemic and fears of a second wave of infections that would re-engage restrictions that could restrain the economic recovery, she said.

“So it’s creating a little bit more volatile trading conditions in the market and just a little bit more sensitivity to the headlines on the virus spreads.”

In New York, the Dow Jones industrial average was up 369.04 points at 24,575.90. The S&P 500 index was up 48.67 points at 2,971.61, while the Nasdaq composite was up 190.67 points to a three-month high of 9,375.75 as Facebook and Amazon shares hit record highs.

While some believe investors could be spurred from the sidelines by the S&P 500 approaching 3,000 points, Bangsund said it is a potential trigger for investors to crystallize profits after a very strong bear market rally spurred on by fiscal and government stimulus.

“We’re close to levels where we were pre-COVID. That’s a positive sign. I’m a little bit more cautious and I think that these levels warrant some caution given that there’s really little in the way of a fundamental catalyst for the rally.”

The energy sector was the big gainer on the TSX, increasing 5.6 per cent with shares of Frontera Energy Corp. and Whitecap Resources Inc. rising 22.4 and 16.5 per cent respectively.

The increases came as crude oil prices rose nearly five per cent on better market balance from growing demand and lower supplies.

The July crude contract was up US$1.53 at US$33.49 per barrel and the July natural gas contract was down 7.6 cents at US$1.91 per mmBTU.

Helping the oil price was a five million barrel drop in weekly U.S. inventories.

Unlike last month’s historic negative crude price on a lack of storage, the June contract ended in positive territory.

“So it’s a slow process, but slowly but surely the market does seem to be finding a better balance.”

The Canadian dollar traded for 71.98 cents US, unchanged from Tuesday.

The health-care sector had the largest decline, falling 1.9 per cent with Aurora Cannabis Inc. reversing some of Tuesday’s large gain by losing 12.7 per cent.

Materials was also lower despite higher gold prices as Barrick Gold Corp. and Kinross Gold Corp. were down more than 3.2 per cent.

The June gold contract was up US$6.50 at US$1,752.10 an ounce and the July copper contract was up 4.2 cents at US$2.46 a pound.

This report by The Canadian Press was first published May 20, 2020.

Companies in this story: (TSX:ABX, TSX:K TSX:ACB, TSX:FEC, TSX:WCP, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

Business

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

40 new COVID-19 cases confirmed in Alberta

Province’s central zone still has no active cases

Alberta reports just seven new COVID-19 cases

‘Today’s numbers mark an occasion to be celebrated’

Broncs to hold virtual camp, free of charge

Broncs Virtual Camp for grades 6 to 11 will begin June 9

Still no confirmed active COVID-19 cases in Red Deer, central zone

There are 15 new confirmed cases were in Alberta, the province said Thursday

UPDATE: Poster contest extended

Kids have one more week to get their entries in

PODCAST: Black Lives Matter in central Alberta

Community organizers come on the show to discuss central Albertan anti-racist movement

Red Deerians protest against racism on Saturday

This was the third protest in the city this week

‘It’s brewing’: Inmates, guards worry about violence after COVID-19 lockdown

‘Thirteen weeks in a cage the size of your (bathroom) has been pretty devastating’

Feds sign $105-million deal with Bombardier for two new Challenger jets

Department of National Defence announced the deal with Bombardier on Saturday

‘Alarmed:’ Health critic calls for more data on COVID-19 in trucking industry

Public Health Agency of Canada does not collect information on long-haul truckers

Montreal man believes rough arrest caught on video was racially motivated

Montreal man believes rough arrest caught on video was racially motivated

N.B. police shooting of Indigenous woman leads to questions on ‘wellness checks’

N.B. police shooting of Indigenous woman leads to questions on ‘wellness checks’

Minister says reckoning on police violence against Indigenous people needed

Minister says reckoning on police violence against Indigenous people needed

Most Read