TORONTO — Canada's main stock index rose Thursday to scrape out a new all-time closing high, while U.S. markets continued to set their own records.
The S&P/TSX composite index closed up 41.55 points at 22,087.26. Its previous record was 22,087.22 in March 2022.
In New York, the Dow Jones industrial average was up 269.24 points at 39,781.37. The S&P 500 index was up 16.91 points at 5,241.53, while the Nasdaq composite was up 32.43 points at 16,401.84.
Markets are in “glass half full” mode after Wednesday’s U.S. Federal Reserve interest rate announcement, said John Zechner, chairman and lead equity manager at J. Zechner Associates.
The central bank held its key interest rate steady and indicated it expects to cut rates three times this year.
“Inflation has come way down, and that gives us the ability to approach this question carefully and feel more confident that inflation is moving down sustainably,” said Fed chair Jerome Powell on Wednesday.
Investors had been concerned the Fed could lower its 2024 rate cut projections from three to two because of recent economic data, which has been stronger than expected, said Zechner.
The fact the bank kept their projection at three was a green light for an already bullish market, he said, adding that the trend over the last few weeks has been one of broadening strength across more sectors.
The rally of the past few months that’s seen markets hit multiple records has been largely driven by big technology names.
The broadening shows investors increasingly believe they’re in an “economic sweet spot,” said Zechner.
Whether rates are cut in May, June, or July, “the next move is lower.”
Apple weighed on U.S. markets Thursday. Its shares dropped four per cent after being hit with an antitrust lawsuit from the U.S. Department of Justice.
Meanwhile, Reddit’s long-anticipated initial public offering saw shares soar, closing at US$50.44 on the Nasdaq after an initial price of US$34 per share.
The success of the IPO doesn’t necessarily spell long-term success for the stock, noted Zechner, but does illustrate the current momentum in U.S. equities.
In Canada, where economic data has been weaker, the central bank has nevertheless been more hawkish with its comments, said Zechner.
“Quite honestly, they probably would have more reason to be a little more dovish on interest rates, because the economic data in Canada is far worse than in the U.S.,” he said.
The Canadian dollar traded for 73.94 cents US compared with 73.75 cents US on Wednesday.
The May crude oil contract was down 20 cents at US$81.07 per barrel and the May natural gas contract was down a penny at US$1.83 per mmBTU.
The April gold contract was up US$23.70 at US$2,184.70 an ounce and the May copper contract was up a penny at US$4.06 a pound.
-- With files from The Associated Press
This report by The Canadian Press was first published March 21, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
