Canada’s major stock index ended the day largely unchanged as strength within the energy sector was offset by softness in other sectors, while U.S. markets rose.
The S&P/TSX composite index was down 5.14 points at 20,188.19.
In Recent York, the Dow Jones industrial average was up 108.82 points at 33,153.91. The S&P 500 index was up 21.27 points at 4,012.32,while the Nasdaq composite was up 83.33 points at 11,590.40.
If the rally in January was fuelled by optimism from investors, this week represented more of a reality check, said Ashish Utarid, assistant vice-president of investment strategy at IG Wealth Management.
“That optimism was fuelled by a possible rate cut by the Fed in late 2023,” said Utarid. But previously few weeks, hopes of rate cuts in Canada and the U.S. have been largely dashed, he said, and Utarid sees no reason for cuts this 12 months unless there’s a deep recession.
With the U.S. consumer still spending at high levels, and fewer sensitive to rate hikes than the Canadian consumer, the U.S. is faced with a rather more urgent fight against inflation, said Utarid. At the very least two more small hikes are expected from the Federal Reserve, while Canada’s central bank has said it’s pausing rates for now.
“There’s no indication that Canada needs to extend rates” at this point, said Utarid.
U.S. jobless claims released Thursday were down again according to predictions, Utarid noted.
With data rolling in from the tip of 2023, including earnings within the U.S. and Canada, the market has calmed down from its January excitement, he said.
“It’ll really paint an image of what 2022 was, and what 2023 goes to appear to be.”
Markets opened higher Thursday before giving up their gains, he said. The TSX energy index was up 1.9 per cent, offset by weakness in financials, telecom, utilities and metals.
The Canadian dollar traded for 73.81 cents UScompared with 73.84 cents US on Wednesday.
The April crude oil contract was up US$1.44 at US$75.39 per barrel and the April natural gas contract was up 13 cents at US$2.43 per mmBTU.
The April gold contract was down US$14.70 at US$1,826.80 an oz and the March copper contract was down 13 cents at US$4.06 a pound.
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