TSX ends down week with rebound in commodities

TORONTO — Canada’s main stock index climbed higher to end a week constrained by concerns about sabre-rattling from the U.S. against China and more weak economic data.

The S&P/TSX composite index closed up 129.24 points at 14638.90 as gains in energy and materials stocks offset losses in finance and industrials. However, the index was down 2.2 per cent for the week.

In New York, the Dow Jones industrial average was up 60.08 points at 23685.42. The S&P 500 index was up 11.20 points at 2863.70, while the Nasdaq composite was up 70.84 points at 9014.56.

Investors were a little rattled this week by renewed criticism of China by U.S. President Donald Trump, who said he has no interest in speaking to his Chinese counterpart right now. That has stoked fears of a renewed trade war despite the first phase of a trade agreement between the world’s two largest economies.

“We’ve seen over the past couple of days that the China risk has re-emerged into the equation,” said Macan Nia, senior investment strategist at Manulife Investment Management.

The question of Huawei surfaced Friday with the U.S. government imposing new restrictions on the Chinese tech giant, limiting its ability to use American technology to design and manufacture semiconductors produced for it abroad.

The Huawei news had an impact going into the opening of markets but traders seem to have taken the news in stride, said Nia.

“That doesn’t mean that it’s not top of mind for investors going forward. It will be, but its impact on today’s movement, it seems that that’s been dissipated.”

Nia said the likelihood that actions against China will evolve into something more serious are quite low, especially during the COVID-19 pandemic.

“I think right now investors are taking it with a grain of salt.”

Investors have largely ignored negative economic data, expecting the impact of lockdowns from the novel coronavirus would be horrible.

On Friday, U.S. retail and industrial numbers for April were weak and showed the effects of the COVID-19 outbreak.

Nia said next week’s earnings will provide some clues about the impact of economic reopenings on corporate earnings going forward.

“And I think we’ll also get some better idea of how effective we have been in terms of flattening the curve over the next couple of weeks as we slowly and very calculated open up these economies across the world.”

The health care sector was the big mover on the day, gaining 10.6 per cent on strong results from Aurora Cannabis Inc. that prompted its shares to surge nearly 67 per cent Friday. Cannabis companies Hexo Corp. and Canopy Growth Corp. climbed 22.6 and 14.7 per cent respectively.

Materials rose four per cent as the price of gold climbed closer to a record high.

The June gold contract was up $15.40 US at $1,756.30 US an ounce and the July copper contract was down 1.55 cents at $2.33 USa pound.

Energy was up three per cent with Cenovus Energy Inc. climbing 5.5 per cent and Whitecap Resources Inc. five per cent higher.

The July crude contract gained $1.64 US or 5.9 per cent at $29.52 US per barrel and the June natural gas contract was down 3.5 cents at $1.65 US per mmBTU.

Crude oil prices gained 12.8 per cent for the week on increasing demand with economic reopenings and lower production from Saudi Arabia and U.S. shale producers.

Nia expects the market performance seen this week will continue as investors want visibility to stoke their confidence.

“So I think over the next couple of weeks, we’ll see some more weakness, but nothing material, like where we would retest the lows of March 23.”