TSX rises despite mixed economic data
Canada’s benchmark stock index on Thursday posted its second straight positive close after three consecutive losses as a light economic calendar focused a spotlight on earnings reports and mixed economic reports from the U.S.
The S&P/TSX composite index rose 34.79 basis points, or 0.29%, to close at 12,145.85. Six of the 10 sub-indexes advanced, led by technology, up 1.39% and industrials, which rose 1.36%. Materials led the decliners after Goldcorp Inc., which reported first-quarter earnings after the close on Wednesday, and Potash Corp. of Saskatchewan both missed analysts’ estimates. Goldcorp shares dropped 6.03% to $38.05 on Thursday, while Potash fell 3.21% to $42.25.
The price of crude oil rose US43¢ to US$104.55 a barrel in New York, while gold jumped US$18.20 to US$1,659.60 an ounce.
The Canadian dollar slipped five basis points to US$1.0163 after hitting a sevenmonth high against the U.S. greenback the previous day.
Futures markets are “starting to price in the probability of a Bank of Canada rate hike by the fall, and that’s really driving the Canadian dollar’s strength,” Shane Enright, executive director at Canadian Imperial Bank of Commerce’s CIBC World Markets unit in Toronto, told Bloomberg.
“The fact that we’re outperforming the other commodity currencies is a function of the rate story.”
In the U.S., initial jobless claims for the previous week came in higher than expected, but so did pending home sales for March, injecting some optimism into the U.S. housing market.
“The 4.1% jump in U.S. pending home sales in March to two-year highs flags a bounce in existing home sales this spring, even if many buyers renege on their offers (a major drawback of lower house prices is that banks want larger deposits to backstop equity),” said Sal Guatieri, an economist with BMO Capital Markets. “While the warmest March on record no doubt pulled forward some sales, the trend is likely improving.”
There was choppy trading on U.S. markets Thursday morning after the jobless claims report and after a number of large U.S. companies, including UPS and Exxon Mobile missed estimates with their quarterly earnings reports. Still, the Dow Jones industrial average gained 113.90 points, or 0.87%, on the day, closing at 13,204.62, and the Nasdaq composite rose 20.98 points, or 0.69%, to 3,050.61.
“We’re more confident,” Andrew Milligan, the Edinburgh-based head of global strategy at Standard Life Investments Ltd., told Bloomberg.
Canada’s junior Venture exchange closed at 1,393.24, a gain of 22.12 points, or 1.61%.