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Indices Go Nowhere but Up

Baystreet.ca
·4 min read

Equities in Toronto followed their American brethren into the sky Wednesday, following a softer-than-expected inflation report.

The TSX Composite Index strengthened 41.42 points to wind up Wednesday at 22,284.76.

The Canadian dollar jumped 0.3 cents at 73.49 cents U.S.

Utilities led the list of winners, with Boralex capturing $2.15, or 7.3%, to $31.50, while units of Brookfield Renewable Partners leaped $1.40, or 3.8%, to $37.85.

Tech issues also flew, with Bitfarms picking up 33 cents, or 15%, to $2.53, while HUT 8 Mining progressed $1.35, or 12.7%, to $12.00.

Gold also shone, with Centerra Gold shares stronger by 25 cents, or 2.8%, to $9.16, while Alamos Gold hiked 46 cents, or 2.1%, to $21.99.

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Health-care shares stumbled, though, as Chartwell Retirement Residence units gave up 29 cents, or 2.3%, to $12.39, while Tilray handed over three cents, or 1.1%, to $2.82.

Boyd Group Services weighed heaviest on industrial concerns that lost ground, heading earthward $18.24, or 7.1%, to $238.50, while SNC-Lavalin lost $2.71, or 4.9%, to $53.14.

Wednesday proved a busy day on the economic calendar, with housing starts measuring 240,200 for April, compared to 242,300 in the prior-year quarter, while manufacturing sales declined 2.1% in March, mainly driven by lower sales of petroleum and coal products as well as motor vehicles. Sales of machinery posted the largest increase.

The Canadian Real Estate Association told us Wednesday national home sales declined 1.7% month-over-month in April. Actual (not seasonally-adjusted) monthly activity came in 10.1% above April 2023.

ON BAYSTREET

The TSX Venture Exchange added 1.99 points by close to 601.87.

All but two of the 12 TSX subgroups finished the day looking up, led by utilities, better by 1.7%, information technology, improving 1.2%, and gold, up 0.8%

The three laggards were health-care, ailing 0.4%, industrials, down 0.2%, and energy, 0.1% less energetic.

ON WALLSTREET

Read:

The S&P 500 and NASDAQ Composite popped to record highs Wednesday and added to their strong 2024 performances. The major averages were boosted by a lighter-than-expected U.S. consumer inflation report.

The Dow Jones Industrials popped 349.89 points to 39,908.

The S&P 500 surged 61.47 points, or 1.2%, to 5,308.15.

The tech-heavy index rocketed 231.21 points, or 1.4%, to 16,742.39.

All three major averages closed at records. Year to date, this is the 23rd record close for the S&P 500, the 18th for the Dow and eighth for the NASDAQ.

Stocks have been on a tear this year, as expectations for lower Fed rates and enthusiasm around artificial intelligence — and its potential to boost profits — lifted investor sentiment. The S&P 500 is up more than 11% year to date. That said, the broad market index stumbled last month as worries over sticky inflation pressured equities.

Market leaders such as Nvidia popped upon the inflation reading, with shares of the GPU manufacturer rising 3.6%. Tech titans Apple and Microsoft both added more than 1%.

The CPI rose 0.3% for the month of April, less than the Dow Jones estimate for a 0.4% monthly increase. The gauge increased by 3.4% year over year, in line with expectations. Monthly and yearly numbers for core CPI, which excludes volatile food and energy prices, were both in line as well.

The report boosted expectations for Federal Reserve rate cuts in the near future. Fed funds futures trading data now suggests a 51.7% likelihood that the U.S. central bank will ease rates at its September meeting, up from Tuesday’s 44.9% chance of a rate cut the same month.

Prices for the 10-year Treasury rocketed, lowering yields to 4.35% from Tuesday’s 4.44%. Treasury prices and yields move in opposite directions.

Oil prices gained 87 cents to $78.89 U.S. a barrel.

Gold prices hopped $32.00 to $2,386.80.