S&P/TSX composite flat on Wednesday, U.S. stock markets fall

Canada’s main stock index was flat on Wednesday, helped by strength in battery metal and technology stocks, while U.S. stock markets moved lower.

The S&P/TSX composite index was up 13.18 points at 21,656.05.

Kevin Headland, co-chief investment strategist at Manulife Investment Management, said the TSX has been outperforming its U.S. counterparts in recent days, led by commodities gains on Wednesday.

He noted diversified metals and mining companies, along with tech companies such as Shopify Inc., saw their stocks rise, primarily based on global factors.

Tuesday’s inflation data from Statistics Canada had little effect, said Headland, who added the federal budget on the same day was “essentially a benign impact on the overall market.”

StatCan reported its consumer price index for March was up 2.9 per cent compared with a year ago, up from a 2.8 per cent year-over-year increase in February.

The increase came as gasoline prices rose 4.5 per cent compared with a year earlier, helped higher by an increase in global oil prices.

But Headland said the market is affected more by whether there are any “relative surprises than the actual specific data that gets announced.”

“Inflation kind of came out really around expectations, so there wasn’t really any material surprise,” said Headland.

“The data is now providing a support for the Bank of Canada to likely announce a rate cut in the June meeting.”

In New York, the Dow Jones industrial average was down 45.66 points at 37,753.31. The S&P 500 index was down 29.20 points at 5,022.21, while the Nasdaq composite was down 181.88 points at 15,683.37.

Headland said the markets are looking forward to earnings announcements as companies gear up to report their first quarter results for 2024.

He said analysts are observing that markets are so far “less-momentum driven” compared with last year, due in part to better than expected economic data which has calmed concerns of a looming recession.

There’s also more certainty given the expectations of a rate cut by the U.S. Federal Reserve.

“It’s more about the focus on the individual companies now,” he said.

“The market is much more focused on … the quality of the businesses and their expected earnings announcements and results versus the more macro: is the Fed going to raise rates or not? When are they going to cut? Will they or won’t they?”

The Canadian dollar traded for 72.50 cents US compared with 72.35 cents US on Tuesday.

The May crude oil contract was down US$2.67 at US$82.69 per barrel and the May natural gas contract was down two cents at US$$1.71 per mmBTU.

The June gold contract was down US19.40 at US$2,388.40 an ounce and the May copper contract was up four cents at US$4.34 a pound.