TORONTO — Canada's main stock index gained more than 100 points Thursday, led by strength in financial, industrial and telecom stocks, while U.S. markets were mixed, led by a gain of almost 1.5 per cent on the Dow Jones.
It was the final day of what’s been a very positive month for markets, especially in contrast to the weakness seen in October.
“It’s been an incredibly strong month,” said John Zechner, chairman and lead equity manager at J Zechner Associates, noting that the bond market saw its best returns in decades.
The Nasdaq led November’s rally, so he wasn’t surprised to see it trail the other indexes on the last day of the month.
The S&P/TSX composite index closed up 120.09 points at 20,236.29.
In New York, the Dow Jones industrial average was up 520.47 points at 35,950.89. The S&P 500 index was up 17.22 points at 4,567.80, while the Nasdaq composite was down 32.27 points at 14,226.22.
Investors had a mixed bag of economic and corporate news to react to on both sides of the border on Thursday.
In Canada, the latest GDP reading showed the economy contracted at an annual rate of 1.1 per cent in the third quarter.
After a negative second quarter, market watchers had been anticipating the third quarter would bring news of a technical recession — but in the same release, Statistics Canada revised its second-quarter numbers and reported the economy actually grew instead of shrinking.
Regardless, with interest rate hikes still working their way through the market, it was a matter of when, not if, the economy would contract, said Zechner.
In fact, had Statistics Canada not previously reported a contraction in the second quarter, it’s possible the Bank of Canada would not have paused hikes when it did, he said.
“If the number had come in the way it came in today for the second quarter, the bank may have raised rates further and could have ultimately done more damage down the road.”
Three of the five biggest Canadian banks reported earnings Thursday. While RBC and CIBC both saw their profits rise, TD announced job cuts as its earnings for the quarter were lower. The bank set more aside for bad loans than analysts expected, while both RBC and CIBC set aside more provisions for credit losses as well.
In the U.S., the latest report from the Commerce Department showed prices were unchanged from September to October, slowing from a 0.4 per cent rise the month before. On an annual basis prices rose three per cent in October, down from 3.4 per cent in September.
The numbers show inflation is continuing to moderate, though it’s still not where the U.S. Federal Reserve wants it to be, said Zechner.
The Dow led the way in the U.S. on the back of Salesforce, he said. The company’s stock jumped more than nine per cent after a strong profit forecast.
The price of oil fell Thursday, despite OPEC members announcing production cut extensions.
The Canadian dollar traded for 73.63 cents UScompared with 73.58 cents US on Wednesday.
The January crude oil contract was down US$1.90 at US$75.96 per barrel and the January natural gas contract was down a less than penny at US$2.80 per mmBTU.
The February gold contract was down US$9.90 at US$2,057.20 an ounce and the March copper contract was up three cents at US$3.85 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Nov. 30, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press