North American markets recoup their morning losses to end the day in positive territory

North American markets recovered from early morning losses on Monday to close in positive territory despite falling crude oil prices.

The energy-intensive S&P/TSX Composite Index gained 79 points to close at 20,180.60, even as the price of West Texas Intermediate crude oil was down nearly 3.5% on the day. .

The S&P/TSX capped energy index ended down 1.56%, and the capped materials index was down 1.17% as Canadian mining companies were also hurt by falling commodity prices. raw materials. Health care stocks rose 4.88% and the capped consumer discretionary index rose 1.08%.

In New York, the Dow Jones Industrial Average closed up 151.39 points at 33,912.44. The S&P 500 index rose 16.99 points to 4,297.14, while the Nasdaq composite closed up 80.86 points to 13,128.05.

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Markets rallied throughout the day after first falling early in the morning on new economic data out of China which showed factory output and retail sales in that country weakened in July. China’s central bank also lowered a key interest rate, acknowledging that much more needs to be done to shore up the world’s second-largest economy.

As China is a major global oil importer, the news immediately sent the price of oil and other commodities plummeting. But Craig Fehr – an investment strategist at Edward Jones – said he believed stock markets still had some momentum behind them thanks to the rally that has taken shape in recent weeks.

“The enthusiasm behind the global economy is waning a bit today, but I wouldn’t say there’s huge conviction behind market moves in either direction today,” Fehr said. “I think the markets are still in a wait-and-see mode ahead of some important consumer data later this week.”

Fehr said investors will be watching Tuesday’s release of Canada’s consumer price index closely, which will show how much inflation in that country has risen during the month of July.

If the Canadian figure closely follows the previously released US figure and shows that the pace of inflation there has also started to slow, that will be seen as good news by the market, Fehr said. Investors are eagerly awaiting any signs that the Bank of Canada may relax its efforts to rein in inflation and curb interest rate hikes in the future.

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Click to play the video: 'Global News Morning Market and Business Report - August 11, 2022'

Global News Morning Market and Business Report – August 11, 2022

Global News Morning Market and Business Report – August 11, 2022

New U.S. retail sales data will also be important this week, Fehr said, along with quarterly earnings reports from major U.S. retailers like Walmart, Lowe’s and Home Depot.

“I think the market will see them as an indicator of consumer behavior in this environment,” he said.

While market sentiment has improved significantly since June, Fehr said investors remain cautious. This is partly due to the fact that the North American economy currently appears to be in a “double state of strength and weakness”, with a boiling job market and low unemployment on the one hand and a still high inflation on the other.

“There are still a lot of headwinds out there,” Fehr said. “I would say that sentiment and data are less bad than they were earlier this year, but I think it’s too early to declare victory on the recession front or on the economic front. inflation.”

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The Canadian dollar was trading at 77.47 cents US against 78.23 cents US on Friday.

The September crude contract was down US$2.68 at US$89.41 per barrel and the September natural gas contract was down 4 cents at US$8.73 per mmBTU.

The December gold contract was down US$17.40 at US$1,798.10 an ounce and the September copper contract was down five cents at US$3.62 per pound.

© 2022 The Canadian Press

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