US and Canadian stocks close up in trade tension lull loonie lower

first_imgCanada’s main stock index crept higher Tuesday along with U.S. markets, while the loonie moved lower compared with the U.S. dollar.Markets, especially in the U.S., moved higher after federal reserve Chairman Jerome Powell made comments to congress that were overall positive for equities, said Patrick Bernes, a portfolio manager for CIBC Asset Management.“He characterized the labour markets as pretty strong, he expressed that he’s not overly concerned about financial stability at the moment, and kind of downplayed recent gyrations in the market,” he said.Bernes said Powell did express some concern about trade developments, which could be seen as dovish, but that overall the message seemed to be a continued gradual raising of rates.“I think that the takeaway on that was the fed is staying the course and has no plans to accelerate its tightening path, and that kind of coincided with equities starting to rise throughout the day,” said Bernes.The Toronto Stock Exchange’s S&P/TSX composite index closed up 24.51 points at 16,519.24 in broad gains, led by consumer discretionary and mining stocks.Commodity stocks including gold and energy sectors were also up despite a recent slide in prices for both resources.The August crude contract closed up two cents at US$68.08 per barrel Tuesday, but is down several dollars from where it was trading last week.The slip in crude prices have come as OPEC supplies increase, the Syncrude oilsands plant returns to partial operation, and Libya has managed a boost in production, said Bernes.“That’s what’s been pressuring down oil prices lately, and that’s a headwind for the energy sector.”The S&P/TSX capped gold index managed a 0.75 per cent gain on Tuesday, despite the price of gold sinking one per cent or $12.40 to close at US$1,227.30 an ounce for the August contract.In New York, the Dow Jones industrial average closed up 55.53 points at 25,119.90. The S&P 500 index ended up 11.12 points at 2,809.55 and the Nasdaq composite index closed up 49.40 points at 7,855.12, a record close.Overall, investors are still waiting see how the trade dispute between China and the U.S. that really kicked in on July 6 will play out, said Bernes.“There’s been a bit of a lull, and the market’s in more of a wait-and-see mode.”The Canadian dollar averaged 75.83 cents US, down 0.29 of a US cent. The loonie lost ground to the U.S. dollar despite Statistics Canada data that showed manufacturing sales increased 1.4 per cent to $57.1 billion in May.The improvement came after a 1.1 per cent drop in April, and was higher than the 0.5 per cent boost economists had expected according to those polled by Thomson Reuters Eikon.The August natural gas contract closed down two cents at US$2.74 per mmBTU and the September copper contract was down two cents at US$2.74 a pound.last_img

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