Gold, oil go higher, but loonie takes dip
TORONTO — Canada’s main stock index moved up moderately on gold and oil gains Tuesday, while New York indices were little changed on mixed economic news coming out of the United States.
The Toronto Stock Exchange’s S&P/TSX composite index added 84.67 points at 15,669.07, with many sectors contributing to the advance, including energy, base metals and gold producers.
“You’ve got oil prices that have moved higher and that’s always positive for the TSX and you’ve also got commodity prices moving higher,” said Scott Vali, vice-president of equities and a portfolio manager at CIBC Global Asset Management.
The May crude contract was up 79 cents at $51.03 US per barrel, which Vali in part attributed to more constructive oil inventory levels data coming out of the U.S. in the last week.
“The market had kind of been questioning the strategy with OPEC over the last couple of weeks and I think that’s kind of been pushed back,” he said.
OPEC members, including Saudi Arabia, agreed in late November to cut their production by 1.2 million barrels a day, the first reduction agreed to by the 14-member cartel since 2008. Eleven other non-OPEC oil-producing countries promised in December to cut an additional 558,000 barrels a day, reaching an overall reduction of 1.8 million barrels per day.
In other commodities, the June gold contract advanced $4.40 at $1,258.40 US an ounce, May natural gas contracts added 17 cents at $3.29 per mmBTU, and May copper contracts were up a penny at $2.61 a pound.
The Canadian dollar was at 74.59 cents US, down 0.11 of a cent.
South of the border, major New York indices were barely positive. The Dow Jones industrial average gained 39.03 points at 20,689.24, while the S&P 500 inched ahead 1.32 points to 2,360.16 and the Nasdaq composite index edged up 3.93 points to 5,898.61.
“Broadly, the market is digesting mixed economic news,” said Vali, referencing disappointing data out of the automotive sector Monday in which Ford, Fiat Chrysler, Honda and Toyota all reported sales declines in the U.S. last month as consumers’ appetites for passenger cars waned. “That’s got some concerned in the market with respect to the ability of the auto sales to continue at the pace they had been, and what that means for the broader economy, if this is the first sign that the consumer is slowing down to some extent.”
Investors are also grappling with President Donald Trump’s ability to follow through with his repeated promises to reform taxes, slash red tape and ramp up defence and infrastructure spending — which initially buoyed the markets since the U.S. election in November — after his recent failed bid to replace Obamacare.
“Given the issues he had with the healthcare bill there’s questions again around what the success rate’s going to look like from the standpoint of tax reform and stimulus,” said Vali.
Meanwhile, Hudson’s Bay Co. reported a $152-million net loss in the fiscal fourth quarter ended Jan. 28, boosting its loss for the fiscal year to $516 million. A year ago, it reported earnings of $370 million for the quarter and $387 million for the year.
The loss includes a one-time non-cash goodwill impairment charge of $116 million driven by weak sales at its Gilt and Saks Off 5th businesses, while it had $333 million in net gains in the year-ago period due to the sale of investments in joint ventures.
The quarter loss came despite a 2.5 per cent increase in retail sales to $4.6 billion and a 13 per cent increase in comparable digital sales on a constant currency basis.