TSX edges up, U.S. markets climb after inflation report

TORONTO — Canada’s main stock index posted a modest gain on Tuesday, while U.S. markets rose after the latest data on inflation.

The Nasdaq notched a 1.5 per cent increase, with some large tech companies regaining momentum, while the S&P 500 rose 1.1 per cent, helping walk back losses from the past two days.

U.S. inflation was 3.2 per cent in February, up slightly from 3.1 per cent in January.

“This is the second month in a row that we got a bit of an upside surprise in inflationary pressures,” said Mona Mahajan, senior investment strategist at Edward Jones.

Despite the higher headline number, she noted that the year-over-year core inflation metric ticked lower to 3.8 per cent, “which I think is what investors wanted to see.”

Stocks rose, resuming their recent trend after a couple of days of weakness. Meanwhile, bond yields also moved higher, which normally would weigh on equities.

In New York, the Dow Jones industrial average was up 235.83 points at 39005.49. The S&P 500 index was up 57.33 points at 5175.27, while the Nasdaq composite was up 246.36 points at 16265.64.

The S&P/TSX composite index closed up 61.80 points at 21831.02.

Later this week, investors will also get more reports on inflation in the U.S., plus retail sales, said Mahajan.

Market expectations for rate cuts to begin in June didn’t shift, said Mahajan.

Inflation is expected to continue moderating against a backdrop of economic resilience, with rate cuts likely on the way, she said.

The U.S. Federal Reserve’s upcoming interest rate decision is next week, but the central bank is expected to hold its key rate steady, as did the Bank of

Canada earlier this month. According to data from CME Group, markets expect another hold in May.

All eyes will remain on inflation, as well as on the consumer, which has remained more resilient than many have expected, said Mahajan.

The Canadian dollar traded for 74.08 cents US compared with

74.12 cents US on Monday.

The April crude oil contract was down 37 cents at $77.56 US per barrel, and the April natural gas contract was down five cents at $1.71 US per mmBTU.

The April gold contract was down $22.50 US at $2,166.10 US an ounce, and the May copper contract was down less than a penny at $3.93 US a pound.

Value of Canadian farmland rises 11.5% in 2023: report

REGINA The value of Canadian farmland rose 11.5 per cent in 2023, a new report by agriculture lending firm Farm Credit Canada has found.

Chief economist J.P. Gervais said while that’s a slight slowdown from the growth in 2022, it’s still a rapid pace given cooling economic conditions overall. “A limited supply of available farmland combined with a robust demand from farm operations is driving that growth.”

The lender’s latest report on farmland values found that they increased in every province tracked except for B.C.

That province saw an average decline of 3.1 per cent, but it still has the highest average farmland values in the country.

The number of farmland transactions is estimated to have declined slightly last year. Farmers are currently being cautious when it comes to investing in their operations, the report said, with expected weaker revenues and elevated borrowing and input costs.