IG news Update,
Broad-based strength against losses in the energy sector on Wednesday helped propel Canada’s main stock index, while US markets rose, especially the Nasdaq, which rose two per cent.
The S&P/TSX Composite Index was down 16.33 points to close at 20,751.05.
The Dow Jones Industrial Average in New York was up 6.92 points at 34,092.96. The S&P 500 index was up 42.61 points at 4,119.21, while the Nasdaq Composite was up 231.77 points at 11,816.32.
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Ian Chong, associate portfolio manager at First Avenue Investment Council Inc., said the market has been very resilient this week.
There was a gradual selloff in the markets during the day as they anticipated the upcoming interest rate announcement by the US Federal Reserve.
Markets turned slightly lower when a rate hike was expected at a quarter percentage point, Chong said, reacting to the central bank’s aggressive messaging that more than one rate hike could still be on the horizon.
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But after Federal Reserve Chairman Jerome Powell gave a speech that indicated the central bank would make future rate decisions on a meeting-by-meeting basis, markets climbed for the rest of the day, possibly bringing some relief, Chong said. .
“This time it seems more balanced,” Chong said.
While it is clear the central bank is not yet ready to stop or pivot, Chong said markets are likely to be relieved that the bank did not double down on its dovish tone.
Meanwhile, oil prices fell on Wednesday and the energy index on the TSX was down 2.8 per cent. Most of these losses were from TC Energy, Chong said, which was lower 5.6 percent on news that it would cost more than expected to complete the Coastal GasLink project.
As earnings continue this week to release results from big tech names including Apple and Alphabet, Chong said the market could reverse some of the week’s gains.
Overall earnings haven’t been as bad as some had expected, Chong said, but some prospects have been weak.
The Canadian dollar traded for 75.07 cents US compared to 74.91 cents US on Tuesday.
The March crude contract was down US$2.46 at US$76.41 a barrel and the March natural gas contract was down 22 cents at US$2.47 per mmBtu.
The April gold contract was down US$2.50 at US$1,942.80 an ounce and the March copper contract was down 12 cents at US$4.11 a pound.
© 2023 The Canadian Press