TORONTO — The Toronto Stock Exchange started the week just a few points off its record high, thanks to support from its information technology and energy sectors.
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U.S. markets also advanced Monday on the heels of last week’s activity, which one analyst described as “rather benign.”
“I attribute this to markets trading more on the factors that have been driving much of the volatility so far this year, namely high inflation, rising interest rates and tensions. geopolitics,” said Craig Fehr, investment strategist for Edward Jones.
“The further we go, the more time the market has had to digest these factors, and I think that’s part of what’s producing this period of sideways movements, which isn’t necessarily a bad thing, especially considering large swings that we saw earlier this year.”
Mr. Fehr pointed out that there was also a bit of a wait-and-see attitude given last week’s strong US labor market data, the expected release on Friday of the Canadian jobs report and the release of the minutes of the last meeting of the Federal Reserve of the United States.
These central bank minutes will be scrutinized by experts for clues about the Fed’s next interest rate decision.
While most expect interest rates to be raised by half a percentage point at upcoming Fed and Bank of Canada meetings to combat runaway inflation, there is some uncertainty about how the Fed will reduce its balance sheet.
“Monetary policy, particularly the pace of rate hikes by the Fed and the Bank of Canada and global central banks as a whole, is really going to be the driving factor in markets for the rest of this year,” he said. Mr. Fehr during an interview.
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The Toronto floor’s S&P/TSX Composite Index gained 132.65 points on Monday to end the session at 22,085.60 points. This is its highest closing level since Thursday’s 22,087.22 points.
Seven of the 11 sectors on the TSX advanced, particularly energy, technology and health care.
In New York, the Dow Jones Industrial Average rose 103.61 points to 34,921.88 points. The broader S&P 500 index advanced 36.78 points to 4,582.64 points, while the Nasdaq Composite index grabbed 271.05 points to 14,532.55 points.
Toronto’s energy sector advanced 1.5% on higher oil prices. Crude prices on the New York Commodity Exchange rose US$4.01 to US$103.28 a barrel, while natural gas fell 0.8 cents to US$5.71 million BTUs.
The increase was more of a rebound from last week’s sharp divestment, rather than a reaction to the news, Fehr said.
The Information Technology sector gained 3.1% as a pause in the strong advance in bond yields hurt growth investing. This group is the one that recorded the largest declines during the correction observed in February and early March.
Shopify’s stock climbed 4.9% on Monday and Lightspeed Commerce’s stock rose 4.7%.
The Materials sector was one of four groups down on Monday, despite rising metal prices.
The price of gold rose US$10.30 to US$1,934.00 per ounce in New York, and copper jumped US9.3 cents to US$4.78 per pound.
In the currency market, the Canadian dollar traded at an average rate of 80.06 cents US, up from 79.92 cents US on Friday.
The Canadian Press