Canada’s main stock index moved higher on Wednesday as it caught up to U.S. gains on its first day of trading after the Christmas and Boxing Day holidays.
Meanwhile, the major U.S. indexes closed up after a mixed start and almost negligible wavering through the day.
The markets made a decent start to the week, said Greg Taylor, chief investment officer with Purpose Investments.
“The Canadian markets were closed yesterday and the (U.S.) markets had a positive day, so some of the move today is catch-up,” he said.
The S&P/TSX composite index was up 134.72 points at 21,015.91.
In New York, the Dow Jones industrial average was up 111.19 points at 37,656.52. The S&P 500 index was up 6.83 points at 4,781.58, while the Nasdaq composite was also up 24.60 points at 15,099.18.
Taylor said November and December saw a strong rally for markets and bond yields pulling back, but he doesn’t expect that to extend through January.
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“We’ve already had a lot of that move. It’s now setting up that we could see a bit of a pause or a bit of a struggle of markets in January as we’re coming in, and really overbought levels,” he said.
A move from U.S. President Joe Biden has some investors looking at cannabis stocks, he said.
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Biden on Friday pardoned thousands of people who had been convicted of the use and possession of marijuana in his latest round of executive clemencies meant to rectify racial disparities in the justice system.
Taylor said the move gives new hope to expectations the White House will move to legalize cannabis in 2024.
Canadian cannabis companies, Canopy Growth Corp. and Tilray Brands Inc., were among the big movers on the TSX early in the day before financial stocks gained ground.
Financial services companies including the big banks saw the most trading action during the day. Taylor said further signs of a slowing U.S. economy is good news for the sector.
The Canadian dollar traded for 75.73 cents US compared with 75.43 cents US on Friday, as the U.S. dollar weakened.
The February crude oil contract was down US$1.46 at US$74.11 per barrel and the February natural gas contract was up 18 cents US at US$2.44 per mmBTU.
The February gold contract was up US$23.30 at US$2,093.10 an ounce and the March copper contract was up half a cent at US$3.96 a pound.
Strong performance by commodities is also good for the Canadian market, Taylor said.
“We’ve got a decent move with copper up. We’ve got a new record high in gold.”
London’s gold benchmark hit an all-time high Wednesday, according to financial data firm Refinitiv.
Spot gold is on track for its best performance since 2020.
“Gold hasn’t really worked for a number of years, and maybe now it’s going start to finally start working,” Taylor said.
— With files from The Associated Press
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