TORONTO — Canada’s main stock index rose for a third straight week to the highest closing since March on continuing gains from gold and the strength of the country’s railways.
The S&P/TSX composite index closed up 98.98 points to 16,123.48 for a 2.6 per cent increase on the week.
In New York, the Dow Jones industrial average was down 62.76 points at 26,671.95, but up 6.4 per cent for the week. The S&P 500 index was up 9.16 points at 3,224.73, while the Nasdaq composite was up 29.36 points at 10,503.19.
Gains by materials and industrials offset losses from energy and financials.
The rally by precious metals gold and silver was being driven by concerns about inflation with the Federal Reserve increasing the money supply, said Philip Petursson, chief investment strategist at Manulife Investment Management.
“This is a continuation of the gold rally that we’ve seen since the end of March,” he said.
Materials climbed 2.2 per cent with shares of Silvercorp Metals Inc. and Kinross Gold Corp. up 9.7 and 4.4 per cent respectively.
The August gold contract was up US$9.70 at US$1,810.00 an ounce and the September copper contract was up 0.3 of a cent at US$2.90 a pound.
Industrials moved 1.3 per cent higher with Canadian Pacific Railway rising 1.7 per cent and CN Rail up 1.4 per cent as traffic picked up on a week-over-week basis.
“It shows that the worst of the lockdowns are behind us and there are some sectors that are coming back faster than others,” Petursson said.
Air Canada, meanwhile, lost 3.15 per cent but ended the week up nearly five per cent after a spectacular Wednesday.
Energy lost 1.4 per cent with Crescent Point Energy Corp. down 4.5 per cent and Vermilion Energy Inc. off 4.3 per cent on lower crude and natural gas prices.
The September crude contract was down 18 cents at US$40.75 per barrel and the August natural gas contract was down half a cent at nearly US$1.72 per mmBTU.
The Canadian dollar traded for 73.67 cents US compared with 73.84 cents on Thursday.
The heavyweight financials sector dropped in keeping with initial earnings results from U.S. banks where growth decreased 34 per cent year-over-year.
“So that’s being extended into Canada where the expectation is that we’ll see equivalent declines in earnings on a year-over-year basis for the financials.”
Although wholesale sales in Canada ticked higher in May after posting a record plunge in April due to the COVID-19 pandemic, they were below expectations. In the U.S., consumer confidence fell amid rising COVID-19 infection rates in some states.
Nonetheless, the market seems to be discounting economic data and increases in virus cases, said Petursson.
“The expectation is that some of the data will start to get better. But I don’t think it’s been exceptional in any area and so I don’t think it’s having a meaningful impact on the markets.”
This report by The Canadian Press was first published July 17, 2020.
Companies in this story: (TSX:AC, TSX:SVM, TSX:K, TSX:CNR, TSX:CP, TSX:CPG, TSX:VET, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press
