TORONTO — Canada's main stock index was up for the sixth day in a row despite declines in the base metals, telecom and battery metals indexes, while U.S. markets posted strong gains.
The S&P/TSX composite index was up 119.08 points at 19,471.19.
In New York, the Dow Jones industrial average was up 828.52 points, or 2.59 per cent, at 32,861.80. The S&P 500 index was up 93.76 points, or 2.46 per cent, at 3,901.06, while the Nasdaq composite was up 309.77 points, or 2.87 per cent, at 11,102.45.
U.S. markets are reacting to a combination of earnings reports and weaker than expected economic news, especially on the housing side, said Kevin Headland, chief investment strategist at Manulife Investment Management.
“Some of the inflation data that came in was really at expectations,” he said. “So I think the market is rallying.”
Markets in Canada are more of a mixed bag, said Headland, with commodities and materials dragging the index down. He added that GDP data released Friday didn't bring any major surprises, especially after the Bank of Canada's revised estimates.
“The Canadian equity market doesn't typically move as much on economic data domestically as much as the U.S. market does,” he said.
“We don't have the tailwinds and some of the U.S. names to keep pace with the U.S. market today.”
The Canadian dollar traded for 73.45 cents US,compared with 73.82 cents US on Thursday.
Overall, it’s been a good October, said Headland. “The way September ended set up October for a decent rebound.”
Markets may become less volatile in the weeks and months to come as both Canada and the U.S. near the end of the central banks’ tightening cycles, said Headland.
Earnings have also been coming in broadly better than expected, he added, though there are many companies left to report in the coming weeks.
"Next week should be a pretty busy week," he said, with the U.S. Fed's rate announcement expected alongside more earnings reports and labour data being released in both Canada and the U.S.
"Depending on what the labour announcement is, relative to how the Fed talks about their policy, we might get some volatility to end the next week
— all depends if they're in line," he said. "We expect the Federal reserve not to change their tone ... but we are getting closer to the terminal rate, which I think the market appreciates."
The December crude oil contract was down US$1.18 at US$87.90 per barrel and the December natural gas contract was down 19 cents at US$5.68 per mmBTU.
The December gold contract was down US$20.80 at US$1,644.80 an ounce and the December copper contract was down nine cents at US$3.43 a pound.
This report by The Canadian Press was first published Oct. 28, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
