TORONTO - Strength in industrial stocks helped Canada’s main stock index reach new ground following a string of record highs, while U.S. markets also broke records amid broader gains and hopes of lower borrowing costs.
The breadth of the rally was “striking,” said Brianne Gardner, senior wealth manager with Velocity Investment Partners at Raymond James.
“If we look at health care, semis, home builders and banks, (they) are leading the charge today. So again, that broadening out. Even retail-driven pockets like some of the shorted names and even the profitless techs are rallying.”
“This shows we’re starting to see confidence widening, not just in that concentration in the big tech or in the AI play anymore.”
Thursday’s trading session came after a mixed set of U.S. data kept the path clear for the Federal Reserve to cut interest rates in order to boost the economy.
“People were watching that closely. After the fastest rate hiking cycle in 40 years, the Fed is now poised to pivot,” Gardner said.
She added that markets are pricing in about a 95 per cent chance the Fed lowers borrowing costs next week by 25 basis points.
One of Thursday’s economic reports said more U.S. workers applied for unemployment benefits last week, an indication that the number of layoffs could be rising.
Meanwhile, a report on U.S. inflation showed prices are continuing to rise faster for U.S. households than the Fed hopes, but only by the amount that economists expected.
U.S. consumers paid prices for food, gasoline and other costs of living that were 2.9 per cent higher in August than a year earlier, a slight acceleration from July’s 2.7 per cent inflation rate.
The S&P/TSX composite index was up 228.50 points at 29,407.89.
In New York, the Dow Jones industrial average was up 617.08 points at 46,108.00. The S&P 500 index was up 55.43 points at 6,587.47, while the Nasdaq composite was up 157.01 points at 22,043.07. The S&P 500 set an all-time high for a third straight day.
On the Canadian side, Gardner highlighted the performance of the industrials sector on the TSX.
“The Canadian industrial sector, specifically, is currently experiencing some significant policy shifts that they’re talking about. So that’s certainly something we’re watching closely to see how that is going to impact the overall market,” she said.
Investors also digested an announcement from Prime Minister Mark Carney, where he named the first five projects on the federal government’s fast-track list on Thursday — part of his plan to attract outside investment and bolster the Canadian economy.
The projects include planned energy development, mining and port infrastructure projects from the West Coast to Central Canada.
“I think a lot of us are in a wait-and-see a little bit to see what Carney is going to do. As of now, people have high hopes, and hopefully he can come in and make some big changes.”
The Canadian dollar traded for 72.23 cents US compared with 72.18 cents US on Wednesday.
The October crude oil contract was down US$1.30 at US$62.37 per barrel. The December gold contract was down US$8.40 at US$3,673.60 an ounce.
With files from The Associated Press.
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