While U.S. stock markets gained despite a stronger-than-expected news on wholesale inflation, Canada’s major stock index rose on Wednesday due to strength in the utilities, telecoms, and financial sectors.
According to Greg Taylor, chief investment officer at Purpose Investments, Wednesday proved to be more unpredictable than the week’s opening strong gains. The day’s trading was bumpy, and markets ultimately closed higher.
At 19,663.84, the S&P/TSX composite index ended the day up 162.64 points.
The Dow Jones industrial average in New York increased by 65.57 points to 33,804.87. The Nasdaq composite was up 96.83 points at 13,659.68, while the S&P 500 index was up 18.71 points at 4,376.95.
According to Taylor, energy costs decreased on Wednesday, with oil falling by more than 2%. Oil prices have dropped from their recent highs of above US$90 per barrel to less than US$84.
“It was a surprise to many because people were beginning to take more risks with commodities,” Taylor added.
It’s a little unexpected to see them retreat today, and it’s intriguing to observe that the stocks have slightly improved.
Equity markets may have gained on Wednesday as a result of Exxon Mobil’s US$60 billion acquisition of Pioneer Natural, according to Taylor.
According to a survey on wholesale inflation in the US, prices increased last month more than anticipated. According to Taylor, the findings didn’t, however, disprove the emerging consensus that interest rate hikes by the US Federal Reserve and its Canadian counterpart are coming to an end.
He claimed that even if the Fed’s most recent meeting’s minutes were cautious, a lot has happened since then.
In order to get a sense of how the central bank would go with its next rate decision, Taylor stated, “I think a lot of people are kind of ignoring that.” One of the key pieces of information used by the central bank to make decisions is the consumer inflation report, which is due on Thursday.
To alter the Fed’s course, “it will need to be materially different than expected,” according to Taylor. He also said that the tone will be set by the U.S. bank earnings on Friday.
On Tuesday, the value of the Canadian dollar was 73.51 cents US, down from 73.58 cents US on Tuesday.
The November contract for natural gas was down half a penny at US$3.38 per mmBTU, and the November contract for crude oil was down US$2.48 at US$83.49 a barrel.
December copper was down two cents at US$3.61 a pound, while the December gold contract was up US$12.00 at US$1,887.30 an ounce.