North American stock markets rise on conflicting reactions about COVID-19

North American stock markets rise on conflicting reactions about COVID-19

TORONTO — North American stock markets moved higher to start the week on conflicting reactions to concerns about COVID-19.

The World Health Organization reported a record increase in global cases of virus infections on Sunday with cases rising in several U.S. states.

Gold, technology and consumer staples didn’t follow the normal trading patterns in Monday’s response.

In the U.S., tech stocks were strong to suggest a good recovery while cruise lines and airlines did terribly for the opposite reading.

“In Canada, you’ve got gold and grocery stores — which are typically ones that are going to do well when things are bad — you’ve got gold booming and grocery stores tumbling today, so it’s a little bit all over the place,” said Michael Currie, vice-president and investment adviser at TD Wealth.

“The one common thing today is just the big increase in the number of coronavirus cases.”

Currie said the virus is definitely on the top of people’s radar right now. It is viewed as a measure of the economic recovery.

Materials was the leading sector on the TSX, gaining 2.8 per cent with the price of gold hitting a two-month high. That sent shares of Semafo Inc. and Kinross Gold Corp. up 6.4 and 5.9 per cent respectively.

The August gold contract was up US$13.40 at US$1,766.40 an ounce and the July copper contract was up 4.15 cents at US$2.65 a pound.

“Very often when we see gold being the best it’s not a good day for the markets overall,” Currie said in an interview.

“A lot of investors are jumping on a trade that’s working to keep running it up and there’s no reason right now to be betting against it.”

Tech rose 1.3 per cent in Canada with Lightspeed POS Inc. up 3.7 per cent. In the U.S., the tech-heavy Nasdaq peaked with shares of Apple Inc. hitting a record high after it announced it will use its own chips in devices instead of relying on Intel.

Energy moved positively as crude oil rose above US$40 a barrel to reach its highest level in nearly four months.

The August crude contract was up 90 cents at US$40.73 per barrel and the August natural gas contract was down one cent at nearly US$1.74 per mmBTU.

Consumer staples sank nearly 1.6 per cent with Maple Leaf Foods Inc. down 4.7 per cent and Alimentation Couche-Tard Inc. off 3.1 per cent.

“The safe stable, steady grocery store stocks are right at bottom today, which would be the ones you’d expect to be doing poorly when people are very, very optimistic about a recovery and that would be the opposite with gold,” Currie said.

He said the conflicting signals in the market are as extensive as he’s seen in a long time.

“It might just be it’s a Monday in the summertime and markets are quiet with low volume.”

The S&P/TSX composite index closed up 42.70 points at 15,516.90.

In New York, the Dow Jones industrial average was up 153.50 points at 26,024.96. The S&P 500 index was up 20.12 points at 3,117.86, while the Nasdaq composite was up 110.35 points to a record high close of 10,056.47.

The Canadian dollar traded for 73.83 cents US compared with 73.60 cents US on Friday.

The loonie strengthened after the new Bank of Canada governor, Tiff Macklem, signalled that interest rates will remain low for a while but not get into negative territory.

He said the pandemic will likely inflict lasting damage to demand and supply and the recovery “will likely be prolonged and bumpy, with the potential for setbacks along the way.”

Currie said Macklem’s comments about rates remove some fear of continued interest rate cuts, which would be negative for the dollar.

“So that should put a little bit of a boost under the dollar.”

This report by The Canadian Press was first published June 22, 2020.

Companies in this story: (TSX:ATD.B, TSX:MFI, TSX:LSPD, TSX:SMF, TSX:K, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

Business

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

Just Posted

Sylvan Lake beachgoers spark safety concerns

‘You’re putting your life at risk,’ tweets Rachel Notley

Conservatives call for Trudeau to testify at committee on WE Charity deal

Ethics Commissioner Mario Dion is already investigating whether Trudeau violated the Conflict of Interest Act

Genetic detectives begin work to trace spread of COVID-19 in Canada

The kinds of genetic technology being used for this project did not exist when SARS hit Canada in 2003

Quebec police continue search for father, one day after missing girls found dead

Bodies were found in a wooded area of Quebec City suburb

Lacombe’s Cilantro and Chive informs community of possible COVID-19 case through it’s doors

Individual tests positive after being in restaurant July 4 or July 5

QUIZ: Are you ready for a summer road trip?

How much do you really know about roads, motor vehicles and car culture? Take this quiz to find out.

PODCAST: The Expert tackles the return of sports

Cam Moon, Joe Whitbread, Byron Hackett and Todd Vaughan discuss how sports can come back

Look out, Mars: Here we come with a fleet of spacecraft

Three countries sending unmanned spacecraft

Canmore RCMP respond to multiple hiking injury calls this weekend

EMS and RCMP responded to three separate and unrelated hiking accidents in Kananaskis Country.

How Conservative leadership hopefuls would address the WE scandal if they win

The ethics commissioner has been called in to see if Trudeau broke conflict-of-interest law

With debt, deficit numbers out, experts say Liberals need plan for growth

Borrowing will push the federal debt past $1 trillion by the end of the fiscal year

Most Read