S&P/TSX composite posts small gain, U.S. stock markets mixed as investors await data

Canada’s main stock index rose modestly on Monday, led by gains in energy stocks, while U.S. markets were mixed as the S&P 500 hovered near the record high it hit Friday.

The S&P/TSX composite index closed up 57.70 points at 21,067.30.

In New York, the Dow Jones industrial average was up 125.69 points at 38,797.38. The S&P 500 index was down 4.77 points at 5,021.84, while the Nasdaq composite was down 48.12 points at 15,942.54.

Markets were muted across the board Monday as investors anticipate a pair of major economic data releases in the U.S. this week, said Kathrin Forrest, equity investment specialist at Capital Group.

Tuesday will see the latest update on U.S. inflation, while Thursday will see the latest retail sales data.

“Overall, the market is expecting the disinflation trend to continue,” said Forrest of the CPI report.

“But we’ve heard from the Fed last week that there is still some more work to do.”

Both reports could have implications for interest rate cuts by the U.S. Federal Reserve. If economic data continues to show unexpected strength, “that will make it more difficult for the Fed, in this case, to start cutting earlier in the spring,” said Forrest.

Markets are currently pricing in another rate hold for the Fed in March, according to data from CME Group. Meanwhile, they’re split on whether the central bank will start cutting in May.

Markets in the U.S. have had a really good start to the year, noted Forrest, while Canadian equities have been more subdued with different sector representation and ongoing economic weakness.

“The TSX … has trailed the S&P 500 year-to-date,” she said.

Though markets didn’t make major moves Monday, there was activity underneath the surface as earnings continue to roll in, said Forrest. More than two-thirds of the companies on the S&P 500 have already reported, but a handful of big names will report this week, including Coca-Cola and Kraft Heinz.

As well, news of another merger in the energy sector made waves Monday, Forrest added.

Diamondback Energy announced it would buy Endeavor Energy Resources in a US$26 billion deal to create a drilling giant in the Permian Basin.

The Canadian dollar traded for 74.35 cents US compared with 74.31 cents US on Friday.

The March crude contract was up eight cents at US$76.92 per barrel and the March natural gas contract was down eight cents at US$1.77 per mmBTU.

The April gold contract was down US$5.70 at US$2,033.00 an ounce and the March copper contract was up four cents at US$3.72 a pound.

— With files from The Associated Press