Strength in the energy, utility and industrial sectors helped Canada’s main stock post a small gain Tuesday despite weakness in metals, while U.S. markets were mixed.
The S&P/TSX composite index was up 67.13 points at 20,457.46. The TSX energy index gained 1.37 per cent, while battery metals were down 2.51 per cent.
In New York, the Dow Jones industrial average was down 391.76 points, or 1.14 per cent, at 33,910.85. The S&P 500 index was down 8.12 points at 3,990.97, while the Nasdaq composite was up 15.96 points at 11,095.11.
Financials dragged the Dow down Tuesday after underwhelming earnings from a couple of U.S. banks, said Philip Petursson, chief investment strategist at IG Wealth Management.
“The market was hoping for a positive surprise. And instead of that, they got a negative surprise.”
However, the Nasdaq still managed to post gains thanks to its lack of exposure to the financial sector, said Peturrson.
Meanwhile, Canadian inflation data released Tuesday was slightly better than expected, said Petursson. Inflation cooled to 6.3 per cent in December, down from 6.8 per cent in November and from a high of 8.1 per cent over the summer.
“It’s one more piece of data that confirms the trend,” said Petursson. “And that is that inflation is going to continue to moderate through the remainder of 2023.”
However, the markets are less inclined to react dramatically to economic releases heading into 2023, he said, because there’s a lot less mystery as to what the year is going to look like.
“We are just about at the peak for interest rates and the overnight rate, so the veil of uncertainty has been lifted,” he said.
It might not be all good news up ahead, but at least it’s more predictable than 2022, said Petursson.
“Even though the economic outlook isn’t rosy and robust, it’s almost reassuring to know at least the direction that we’re heading.”
The Canadian dollar traded for 74.68 cents US compared with 74.64 cents US on Monday.
The February crude contract was up 32 cents at US$80.18 per barreland the February natural gas contract was up 17 cents at US$3.59 per mmBTU.
The February gold contract was down US$11.80 at US$1,909.90 an ounceand the March copper contract was up less than a cent at US$4.22 a pound.
Comments