Stocks rise after Trump confirms China deal OK

TORONTO — The tech-heavy Nasdaq composite set new records Tuesday while other stock markets rose after U.S. President Donald Trump confirmed a trade deal with China remains intact.

Markets were headed for a rough day after White House trade adviser Peter Navarro suggested late Monday that the deal was in trouble, before Trump’s clarifying tweet.

“I think if anything it’s just a sign of the knife edge that the market is resting on,” said Craig Jerusalim, portfolio manager at CIBC Asset Management.

“It was ready to pull back sharply if Navarro’s comments were true and clearly after Trump’s all-clear the futures market recovered before equity markets opened up this morning so it was crisis averted on that front.”

The S&P/TSX composite index closed up 47.85 points at 15564.75.

In New York, the Dow Jones industrial average was up 131.14 points at 26156.10. The S&P 500 index was up 13.43 points at 3131.29, while the Nasdaq composite climbed 74.89 points to a record close of 10131.37 after hitting an intraday record of 10221.85.

Nasdaq moved on increases from largecap stocks including Apple Inc. which climbed more than two per cent to reach a new peak.

In Canada, Shopify Inc. tried to keep up, but gained $9 or 0.7 per cent, while other tech names did better.

The sector benefited from Trump’s clamp-down on work visas.

“Canada’s tech sector is going to be the big beneficiary of some of those highskilled workers coming to Canada instead,” Jerusalim said in an interview.

The TSX trailed U.S. markets because tech-related stocks make up a smaller part of the overall market in Canada.

Eight of the 11 major sectors on the TSX climbed, led by energy and materials. Energy gained nearly two per cent even though crude oil prices slipped, after surpassing $41 US a barrel.

Shares of MEG Energy Corp. and Whitecap Resources Inc. increased 7.8 and 6.6 per cent respectively.

The August crude contract was down 36 cents at $40.37 US per barrel and the August natural gas contract was down 4.7 cents at $1.69 US per mmBTU.

Materials was up 1.25 per cent as gold prices hit their highest level in nearly nine years.

The metal was helped by a lower U.S. dollar and it being a hedge against fears about a surge in COVID-19 cases in American cities.

“There is that big concern on the horizon being the reopening of the economy causing COVID case counts to increase … but right now, people are cheering the potential for getting back to normal,” said Jerusalim.

The August gold contract was up $15.60 US at $1,782.00 US an ounce and the July copper contract was down 0.6 of a cent at nearly $2.66 US a pound.

He said markets move up because of a combination of low interest rates and the flow of money out of fixed income and cash that’s sitting on the sidelines into equities.

Grocers pushed consumer staples lower with Empire Co. Ltd. down 3.2 per cent, while industrials slipped on a 2.9 per cent drop in Air Canada shares a day after it again bolstered its liquidity position.

The Canadian dollar traded for 73.99 cents US compared with 73.83 cents US on Monday.

Economic data in Europe and the U.S. was mostly less bad with manufacturing and servicing PMI still contracting, but on an improving trend.

U.S. housing sales, however, were strong and beat analyst expectations.