TORONTO — Broad-based gains led Canada's main stock index to close higher in the shortened Christmas Eve trading session, while U.S. stock markets also rose.
The S&P/TSX composite index ended up 97.84 points at 24,846.82, as most sectors rose other than telecoms and health care.
In New York, the Dow Jones industrial average was up 390.08 points at 43,297.03. The S&P 500 index was up 65.97 points at 6,040.04, while the Nasdaq composite was up 266.24 points at 20,031.13.
The gains added to increases in recent days to help offset the drop in markets last week after the U.S. Federal Reserve released its latest outlook.
The climb however was more likely related to year-end balancing than any change in sentiment, said Dustin Reid, chief fixed income strategist at Mackenzie Investments.
"I think it's mostly just year-end flows that are driving it. I don't think there's anything that's particularly reversed in terms of sentiments since the Fed meeting," said Reid.
There's reallocation by geography, moving asset classes and other adjustments to align portfolios that is likely affecting markets, he said.
"I find that price action around month end, quarter end, and year-end, you shouldn't try and ascribe a ton of fundamental cause as to why things are moving, because there's a lot of flows happening below the surface that are probably driving the price action that are not necessarily fundamentally based."
The U.S. Fed guided for only two rate cuts in 2025 at its Dec. 18 meeting, which pushed down markets for the day. But Reid said the guidance was largely in line with expectations, and the strong U.S. economy has likely since helped boost markets.
The Canadian market, meanwhile, might be benefiting a little from the expectations of even more rate cuts needed here than expected as the economy is showing softness.
On Monday, Statistics Canada said its early estimate for November suggests real GDP for the month edged 0.1 per cent lower for the first drop this year.
"The negative flash print for November really suggests that the bank is going to have a fair bit more work to do," said Reid.
"I think that the market is not pricing in enough easing for calendar '25 for the Bank of Canada."
There was no economic data releases Tuesday to sway markets, he said.
The Canadian dollar traded for 69.51 cents US compared with 69.47 cents US on Monday.
The February crude oil contract was up 86 cents at US$70.10 per barrel and the February natural gas contract was up 16 cents at US$3.50 per mmBTU.
The February gold contract ended up US$7.30 at US$2,635.50 an ounce and the March copper contract was up two cents at US$4.11 a pound.
This report by The Canadian Press was first published Dec. 24, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press
