Progress on U.S.-China front buoys investors

TORONTO — North American markets all closed higher on a broad-based rally fuelled by positive geopolitical news on Wednesday.

Stock markets got a boost after U.S. President Donald Trump said trade talks were progressing and said he would intervene in the case against China’s Huawei Technologies if it helped to reach a trade deal.

They were supported later in the day ahead of British Prime Minister Theresa May surviving a confidence vote.

“The trade issue is definitely the number one thing affecting the markets right now,” said Michael Currie, vicepresident and investment adviser at TD Wealth.

The geopolitical issue drove up big U.S. stocks such as Caterpillar and Boeing that are highly sensitive to China trade.

“Those are the ones getting the boost, so generally the feeling is that’s going to get settled,” he said in an interview.

The S&P/TSX composite index gained 115.23 points to end at 14783.06 with all but the real estate sector rising.

The information technology sector rose 2.2 per cent on the back of gains by Shopify Inc. and Constellation Software Inc.

Higher gold prices helped gold stocks such as Yamana Gold Inc., Kinross Gold Corp. and Goldcorp Inc.

The February gold contract was up $2.80 at $1,250 US an ounce and the March copper contract was up 0.3 of a cent at $2.77 US a pound.

The hike in metal prices stemmed from the strength of the British pound, which put pressure on the U.S. dollar, Currie said.

The Canadian dollar traded at an average of 74.93 cents US compared with an average of 74.62 cents US on Tuesday.

The energy sector was up 1.55 per cent even though crude prices lost ground despite a strong start to the day caused by a drop in U.S. crude inventories, lower Libyan exports and reaction to OPEC cutting production.

“All of that stuff pushed oil up at the beginning of the day, but for some reason it ended the day down,” Currie added.

The January crude contract was down 50 cents at $51.15 US per barrel and the January natural gas contract was down 27.1 cents at $4.14 US per mmBTU.

“It’s not a significant drop … but it’s kind of surprising with the good news that it hasn’t done better,” he said of crude prices.

In New York, the Dow Jones industrial average was up 157.03 points at 24527.27. The S&P 500 index was up 14.29 at 2651.07 while the Nasdaq composite was up 66.48 points at 7098.31.

Mortgage demand falls in second quarter: CMHC

TORONTO — Rising interest rates and slower income and population growth helped temper demand for new mortgages in the second quarter in Canada, according to Canada Mortgage and Housing Corp.

The federal housing agency said Wednesday that fewer Canadians opened new mortgages in the three-month period ending June 30, even though the total number of active mortgages and the value of those mortgages rose during the same quarter compared with a year ago.

In a report analyzing mortgage and consumer-credit trends from credit agency Equifax, CMHC found that there were 205,000 new mortgages in the second quarter of 2018, down 11.9 per cent compared with a year ago.

The decline came as the total number of active mortgage loans grew by 1.3 per cent to six million loans, while the average loan value grew by 3.7 per cent to $205,980.

The country’s total outstanding mortgage balance also rose, up five per cent to $1.23 trillion from a year earlier.