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North American markets end July strong after a busy week of earnings, Fed decision

The TSX ticker is shown in Toronto in this file photo. THE CANADIAN PRESS/Frank Gunn. THE CANADIAN PRESS/Frank Gunn

North American markets ended the last trading day of July on a high note, with Canada’s main stock index up over 200 points and U.S. markets all in the green.

The S&P/TSX composite index closed up 236.21 points at 19,692.92, driven by strength in the energy, industrials and base metals sectors.

A slightly-better-than-expected GDP report in Canada, a nice move higher in oil prices and pretty positive energy earnings helped push the index higher.

Read more: North American markets end trading day in positive territory

The latest GDP reading showed the Canadian economy stayed flat in May, with economic growth slowing down as businesses faced ongoing supply constraints and rising interest rates.

Meanwhile, companies like Imperial Oil Ltd. posted strong quarterly results Friday morning.

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In New York, the Dow Jones industrial average closed up 315.50 points at 32,845.13. The S&P 500 index gained 57.86 points at 4,130.29, while the Nasdaq composite was up 228.09 points at 12,390.69.

“We’re seeing improved risk sentiment,” said Edward Jones investment strategist Angelo Kourkafas in an interview.

Some major technology company’s earnings out of the U.S. also helped lift markets this week, even though they were far from stellar.

“Results have been better-than-feared considering the growth slowdown we saw during the quarter,” Kourkafas said.

The market moves to end the month are a welcome surprise for investors after a challenging first half of the year.

The S&P/TSX composite index is up 4.41 per cent month-to-date, with the S&P 500 index up more than nine per cent month-to-date.

Read more: Shopify drop weighs on S&P/TSX composite on down day for North American markets

“Easing inflation expectations, lower bond yields and then the potential for an earlier pivot by the central banks on rates are the drivers,” Kourkafas said.

On Wednesday, the U.S. Federal Reserve hiked interest rates, but struck a less hawkish tone, signalling to the markets that the central bank is getting closer to the end of this rate hiking cycle.

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But Kourkafas and his team don’t think investors are out of the woods just yet, saying that volatility is here to stay.

“The fact that stocks are bouncing while we are still getting bad economic news is encouraging. At the same time, we don’t expect economic data or earnings data to inflect higher and become much better in the coming quarters. So we could be in a range bound market,” he said.

“And even though earnings results have not been great, stocks have been able to absorb the more cautious outlooks, so we’ve seen stocks higher … especially since the bar was quite low heading into the quarter.”

But if companies continue providing cautious outlooks, markets could turn, he added.

Read more: Energy helps push up S&P/TSX composite up ahead of earnings flurry, fed decision

The Canadian dollar traded for 77.98 cents US compared with 77.91 cents US on Thursday.

The September crude contract was up US$2.20 at US$98.62 per barrel, hitting US$101.88 per barrel earlier in the day.

The September natural gas contract was up 9.5 cents at US$8.23.

The December gold contract was up US$12.60 at US$1,781.80 an ounce and the September copper contract was up nearly ten cents at US$3.57 a pound.

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