Investors turned to private payroll data as Washington delays official reports
Canada’s main stock index extended its run of record highs Thursday, overcoming early losses as investors bet on further rate cuts despite political and economic uncertainty in the United States.
The S&P/TSX composite index closed up 52.92 points at 30,160.59, a new record finish. The index had slipped earlier in the day to an intraday low of 29,903.08 as investors booked profits before recovering in afternoon trading.
Eight of 11 sectors advanced, led by health care, consumer discretionary, and information technology. Curaleaf Holdings Inc. surged 7.07%, while Brp Inc. rose 4.29% and Bitfarms Ltd. gained 4.60%. Brookfield Asset Management Ltd. added 2.01%.
Jillian Bryan, senior investment adviser and portfolio manager at TD Wealth, said the gains came despite a lack of US economic data caused by the ongoing government shutdown in Washington.
“The market’s hitting all-time new highs … we were looking for some jobless claims data today from the US Department of Labor, but that didn’t happen because of the shutdown south of the border,” Bryan told The Canadian Press. “With that data vacuum, I think investors are looking at alternative sources for that information.”
Data from ADP Research released Wednesday showed US private employers cut 32,000 more jobs than they added, fuelling expectations that the Federal Reserve could continue easing interest rates.
The Bank of Canada, which cut its key rate to 2.5% in September, is also expected to act again if economic risks intensify, RTT News reported. Both the Fed and the BoC will announce policy decisions on Oct. 29.
The US government shutdown entered its second day Thursday, delaying key labour reports including nonfarm payrolls. Historically, shutdowns have had “limited impact” on market performance, Bryan said.
On Wall Street, the Dow Jones industrial average gained 78.62 points to 46,519.72. The S&P 500 edged up 4.15 points to 6,715.35, while the Nasdaq climbed 88.89 points to 22,844.05, with all three benchmarks also marking record closes.
The Canadian dollar traded at 71.62 cents US, down from 71.74 cents a day earlier. Commodity markets weakened, with the November crude oil contract slipping US$1.30 to US$60.48 a barrel and December gold falling US$29.40 to US$3,868.10 an ounce.
Despite Thursday’s dip, Bryan said gold’s rally through the year has been “fascinating,” supporting Canadian producers. “It’s had a huge move and of course, that’s helped the TSX because we have obviously some producers that are in the index,” she said.
