TSX posts modest gain, helped by tech and energy, while U.S. markets end Monday mixed

TORONTO — Canada’s main stock index ticked higher on Monday, led by strength in tech and energy, while U.S. markets were mixed.

The week started quietly as investors continue to take stock of what’s being interpreted as somewhat more dovish commentary from central bankers on the economy, said Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management.

The S&P/TSX composite index closed up 54.68 points at 19,709.15.

In New York, the Dow Jones industrial average was up 54.77 points at 34,337.87. The S&P 500 index was down 3.69 points at 4,411.55, while the Nasdaq composite was down 30.36 points at 13,767.74.

Though the price of oil moved up on Monday, Burkett noted the Canadian dollar was flat, which he said was unusual.

The Canadian dollar traded for 72.43 cents US, according to XE.com, compared with 72.36 cents US on Friday.

“There’s a shifting of sentiment around Canada in particular … There’s definitely, I think, de-risking happening within portfolios,” said Burkett.

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“Folks are using the … strong markets of the last two weeks to sell down riskier positions and rotate into less risky stuff.”

Investors are also considering the threat of a U.S. government shutdown looming, with a deadline set for the end of this week.

It’s the second time this year we’ve been in this position, and markets are relatively impervious to the threat, said Burkett.

This week will also see earnings reports from some major U.S. retailers, including Target, TJX and Walmart, as the third-quarter earnings season draws near a close south of the border.

Retail earnings on both sides of the border have been indicating household spending is waning, especially in more discretionary areas like luxury goods or home renovations, said Burkett.

He pointed to Canada Goose as an example, which on Nov. 1 cut its guidance for the full fiscal year.

“Canada Goose has just been decimated over the last year as people just have less budget to spend on things like puffy jackets.”

However, the Canadian stock market doesn’t have as big of a consumer discretionary space as the U.S. markets do, giving retail companies less power to bring the TSX down, he said.

On Tuesday, investors will be focused on the latest inflation data in the U.S., one of the most important data points for the U.S. Federal Reserve.

The December crude contract was up US$1.09 at US$78.26 per barrel and the December natural gas contract was up 16 cents at US$3.20 per mmBTU.

The December gold contract was up US$12.50 at US$1,950.20 an ounce and the December copper contract was up eight cents at US$3.67 a pound.

— With files from The Associated Press