Canada’s main stock index gained almost 100 points Friday, boosted by strength in industrials and telecom, while U.S. markets were also up.
The S&P/TSX composite index was up 96.33 points at 19,980.91.
In New York, the Dow Jones industrial average was up 199.37 points at 33,745.69. The S&P 500 index was up 18.78 points at 3,965.34,while the Nasdaq composite was up 1.10 points at 11,146.06.
The Canadian dollar traded for 74.71 cents UScompared with 74.91 cents US on Thursday.
Investors are at a crossroads right now, said Allan Small, senior investment advisor at iA Private Wealth, with the Fed continuing its hawkish messaging on interest rate hikes and inflation but with earnings season delivering better-than-expected news for many sectors.
Feelings are mixed, said Small, and as a result investors are in “wait and see” mode.
“Everybody’s trying to figure out whether or not we’re going to see any growth next year, whether or not economies will go into recession the first half of next year,” he said.
After weeks of market volatility with wild swings reacting to new data, markets are in a holding pattern now, he said.
Small is concerned that central banks seem bent on continuing to raise rates when much of the current inflationary pressure comes from things like food and gas, which have been affected by a wide variety of ongoing issues such as the Russia-Ukraine war, and China’s strong COVID policies.
For example, oil was down again Friday on concerns about future demand amid economic uncertainty, including worries about China’s COVID-19 lockdown policies as cases rise.
The January crude contract was down US$1.29 at US$80.11 per barrel and the December natural gas contract was down seven cents at US$6.30 per mmBTU.
Small said if the central banks pull too hard on the interest rate lever, some sectors could be hit really hard, such as real estate.
“If central banks are going to continue to raise rates, they have to be extremely, extremely careful, because obviously, there are certain sectors that are a lot more sensitive than others,” he said.
“It’s not like the Fed or Bank of Canada can surgically pinpoint the industry or the place that they want things to slow down without interfering or affecting other spots.”
The December gold contract was down US$8.60 at US$1,754.40 an ounce and the December copper contract was down six cents at US$3.63 a pound.