North American stock markets climb on optimism about economic re-openings

North American stock markets climb on optimism about economic re-openings

TORONTO — North American stock markets moved higher midweek on optimism surrounding economic reopenings following a two-month lockdown.

Investor sentiment also drove up crude oil prices again which helped to support the Toronto stock market.

“Markets are in full-on risk-on mode today,” said Candice Bangsund, portfolio manager for Fiera Capital.

The S&P/TSX composite index closed up 112.15 points at 14,997.63, after playing catch up for a strong rally in the U.S. on Victoria Day Monday.

U.S. markets recovered Wednesday, a day after losing ground on concerns about the viability of a potential vaccine for COVID-19.

“Investors have shifted their focus away from disappointing news on a potential (COVID-19) vaccine, and today are focusing on further easing of restrictions and the gradual reopening of the economy all of which has boosted appetite for risky assets across the board,” she said.

There’s a tug-of-war between the hopes for a viable therapeutic to stem the pandemic and fears of a second wave of infections that would re-engage restrictions that could restrain the economic recovery, she said.

“So it’s creating a little bit more volatile trading conditions in the market and just a little bit more sensitivity to the headlines on the virus spreads.”

In New York, the Dow Jones industrial average was up 369.04 points at 24,575.90. The S&P 500 index was up 48.67 points at 2,971.61, while the Nasdaq composite was up 190.67 points to a three-month high of 9,375.75 as Facebook and Amazon shares hit record highs.

While some believe investors could be spurred from the sidelines by the S&P 500 approaching 3,000 points, Bangsund said it is a potential trigger for investors to crystallize profits after a very strong bear market rally spurred on by fiscal and government stimulus.

“We’re close to levels where we were pre-COVID. That’s a positive sign. I’m a little bit more cautious and I think that these levels warrant some caution given that there’s really little in the way of a fundamental catalyst for the rally.”

The energy sector was the big gainer on the TSX, increasing 5.6 per cent with shares of Frontera Energy Corp. and Whitecap Resources Inc. rising 22.4 and 16.5 per cent respectively.

The increases came as crude oil prices rose nearly five per cent on better market balance from growing demand and lower supplies.

The July crude contract was up US$1.53 at US$33.49 per barrel and the July natural gas contract was down 7.6 cents at US$1.91 per mmBTU.

Helping the oil price was a five million barrel drop in weekly U.S. inventories.

Unlike last month’s historic negative crude price on a lack of storage, the June contract ended in positive territory.

“So it’s a slow process, but slowly but surely the market does seem to be finding a better balance.”

The Canadian dollar traded for 71.98 cents US, unchanged from Tuesday.

The health-care sector had the largest decline, falling 1.9 per cent with Aurora Cannabis Inc. reversing some of Tuesday’s large gain by losing 12.7 per cent.

Materials was also lower despite higher gold prices as Barrick Gold Corp. and Kinross Gold Corp. were down more than 3.2 per cent.

The June gold contract was up US$6.50 at US$1,752.10 an ounce and the July copper contract was up 4.2 cents at US$2.46 a pound.

This report by The Canadian Press was first published May 20, 2020.


Ross Marowits, The Canadian Press


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

City of Red Deer down to one confirmed active case of COVID-19

18 new cases were confirmed across the province Saturday

Lacombe’s museums change summer operations due to COVID-19

Lacombe & District Historical Society hoping for pre-booked, members of the same household tours

Lacombe’s Midway Centre looking to attract tenants

Albertan economy, COVID-19 leading to difficulty finding suitors

Facing changes together: Your community, your journalists

The Lacombe Express covers the stories that matter to you and to our community

N.S. fire crews continue battling ‘out-of-control’ Porters Lake blaze

Word of the fire first emerged early Saturday afternoon

Technology, representation butt heads amid debate over resuming Parliament

The Liberals are now proposing four meetings a week until June 17

Procession for Snowbirds crash victim makes its way through Halifax

The 35-year-old military public affairs officer and Halifax native died in the crash

Who is at highest risk of exposure to COVID-19? Firefighters, drivers, pharmacists, cooks

Central Alberta firefighter says virus taking toll on mental health

The latest numbers on COVID-19 in Canada as of May 23

There are 83,621 confirmed and presumptive cases in Canada

Procession for Snowbirds crash victim to make its way through Halifax today

The military public affairs officer died in the Snowbirds Tutor jet crash in B.C. last Sunday

Employers worry about safety, cash flow, second wave in COVID-19 restart

Only eight per cent of employers were fully prepared to restart operations, survey finds

Central Alberta woman recognized by province for making hospital gowns

Northern Lights Volunteer Recognition program honours Christine Engel

Most Read