TORONTO — Broad-based strength helped Canada's main stock index post a small gain Monday, while U.S. stock markets rose by more than one per cent.
The S&P/TSX composite index was up 90.11 points at 20,702.23.
In New York, the Dow Jones industrial average was up 376.66 points, or 1.1 per cent, at 34,245.93. The S&P 500 index was up 46.83 points, or 1.14 per cent, at 4,137.29, while the Nasdaq composite was up 173.67 points, or 1.5 per cent, at 11,891.79.
Markets were on the sunny side on Monday ahead of Tuesday’s U.S. inflation data release, said Angelo Kourkafas, an investment strategist at Edward Jones.
“We're seeing a bit of a modest rebound after last week's pullback,” said Kourkafas, noting that last week was the first down week for the TSX this year.
“In the absence of any news and with bond yields lower, that is helping the growth segments of the market,” he said, such as technology.
Monday’s upward movement shows some optimism about Tuesday’s inflation data, said Kourkafas, with some investors perhaps betting they’ll see signs of continued slowing. But if the data doesn’t live up to their expectations, Tuesday could see some market volatility, he said.
“The U.S. CPI is going to be the major market mover this week,” said Kourkafas.
Though the most recent jobs data in Canada and the U.S. was a lot hotter than expected, Kourkafas said he was encouraged by slowing wage growth, meaning there’s more of a chance now that the economy could achieve a soft landing, meaning inflation slows adequately without a recession.
But he cautioned that investors may be getting a little too complacent in their assumptions of this scenario.
"Investors should be reminded that the disinflationary path might not be a straight glide down," he said.
However, Kourkafas highlighted a New York Federal Reserve consumer survey Monday that showed income growth is down, which is a positive sign from an inflation standpoint.
The Canadian dollar traded for 74.95 cents US compared with 74.84 cents US on Friday.
The March crude contract was up 42 cents at US$80.14 per barreland the March natural gas contract was down 11 cents at US$2.41 per mmBTU.
The April gold contract was down US$11.00 at US$1,863.50 an ounce and the March copper contract was up four cents at US$4.06 a pound.
This report by The Canadian Press was first published Feb. 13, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
