S&P/TSX composite higher, U.S. markets mixed as record-breaking first quarter ends

<p>The S&P TSX composite index screen at the TMX Market Centre in downtown Toronto is photographed on November 11, 2022. THE CANADIAN PRESS/ Tijana Martin</p>. TIJ

Canada’s main stock index rose to a new closing high Thursday ahead of the long weekend, while U.S. markets were mixed as a record-breaking quarter for equities came to a close.

U.S. indexes broke record after record this quarter, while the S&P/TSX composite was more subdued but managed to set a few records of its own as the quarter-end drew near.

The S&P/TSX composite index closed up 59.95 points on Thursday at 22,167.03.

In New York, the Dow Jones industrial average was up 47.29 points at 39,807.37, hitting a new record. The S&P 500 index was up 5.86 points at 5,254.35, another all-time high, while the Nasdaq composite was down 20.06 points at 16,379.46.

However, Thursday was a relatively lacklustre way to end the first quarter of 2024, said Rose Devli, portfolio manager at 1832 Asset Management.

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“I thought there would be more of a quarter-end move, rebalancing out of equities into fixed income, and then also kind of just rebalancing in general,” she said.

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Markets will be closed for Good Friday, but investors will nevertheless be eyeing a fresh report on the U.S. personal consumption expenditures index, a measure of inflation preferred by the U.S. Federal Reserve. As well, Fed chair Jerome Powell is set to speak at an event.

That could be why the markets were so muted Thursday, said Devli, after a “hawkish” speech by Fed governor Christopher Waller on Wednesday surprised some.

Waller said “there is no rush to cut the policy rate” in a speech late Wednesday based on recent data, adding that it’s prudent to hold the rate steady “perhaps for longer than previously thought.”

“(It) just seems that the market is waiting for Powell’s comments tomorrow after the PCE,” Devli said.

However, Devli noted that much of the usual quarter-end rebalancing has been going on for the duration of this week, which has been quieter in terms of economic news after last week’s U.S. Federal Reserve interest rate decision.

New reports in the U.S. Thursday showed the economy’s growth last quarter was stronger than expected, while fewer workers applied for unemployment benefits last week.

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Meanwhile in Canada, real GDP rose 0.6 per cent in January, and Statistics Canada said preliminary estimates point to a 0.4 per cent gain in February.

The report, while not necessarily a surprise, was “robust,” said Devli.

Over the past quarter, markets have continued the rally they began in October, led in part by optimism over artificial intelligence.

At the same time, markets have steadily slimmed down the number of interest rate cuts they expect this year from the Fed, from roughly double the central bank’s projection heading into 2024.

“The fact that equities are at all-time highs still, even though we’ve priced out three rate cuts, is quite remarkable,” said Devli.

The Canadian dollar traded for 73.80 cents US compared with 73.60 cents US on Wednesday.

The May crude oil contract was up US$1.82 at US$83.17 per barrel and the May natural gas contract was up five cents at US$1.76 per mmBTU.

The June gold contract was up US$25.70 at US$2,238.40 an ounce and the May copper contract was up a penny at US$4.01 a pound.

— With files from The Associated Press

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