TORONTO – Canada’s leading stock index closed a record week falling within 100 points of another milestone on a broad rally led by healthcare and commodities.
The S & P / TSX Composite Index set another high at the end, gaining 77.77 points to 19,852.18 after peaking at 19,904.79, just below the 20,000 point threshold.
âIt will be very interesting if it can break through that psychological barrier in the short term,â said Kevin Headland, senior investment strategist at Manulife Investment Management.
The Toronto market outperformed its US peers on the day, week and last month. The TSX climbed 1.7 percent in the shortened holiday week and 3.9 percent in May with one trading day remaining.
In New York, the Dow Jones Industrial Average was up 64.81 points to 34,529.45 to end its month with US markets closed Monday for the Memorial Day holiday. The S&P 500 Index was up 3.23 points to 4,204.11, while the Nasdaq composite was up 12.46 points to 13,748.74.
US trading volumes were quite weak heading into the long weekend after strong action on Thursday. The Dow and S&P have been in a positive environment in recent weeks.
Ten of the TSX’s top 11 sectors were up with healthcare up 2.5 percent followed by commodities, while utilities were the only one lagging behind.
Cannabis growers got a boost after Hexo Corp. announced the acquisition of Redecan for $ 925 million, which pushed its shares up 9.5%. Shares of Cronos Group Inc. rose 14.8%, while Organigram Holdings Inc. rose 9.7%, Aurora Cannabis Inc. rose 6.6% and Canopy Growth Inc. rose 6.1%.
âWhen you see some of the cannabis players advancing, it seems like a majority of companies are advancing as well,â Headland said in an interview.
Commodities and energy rose despite the movement of commodity prices in opposite directions.
Gold hit its highest level since January as crude oil slipped on the day but remained 4.3% higher for the week and for the month of May.
The August gold contract was up US $ 6.80 to US $ 1,905.30 an ounce and the July copper contract was up 1.45 cents to nearly 4.68 US $ per pound.
The shares of Barrick Gold Corp. gained 3.1 percent.
The July crude contract fell 53 cents to US $ 66.32 per barrel and the July natural gas contract rose 2.8 cents to US $ 2.99 per mmBTU.
MEG Energy Corp. rose 3.9 percent, followed by WCP Resources Inc. at 2.9 percent.
Headland said oil took a bit of a breather that day, but fundamentals are solid as the traditionally busy summer driving season approaches.
“I would expect oil to trend higher in the short term, just because of the expected imbalance between supply and demand that is going to manifest itself, especially as we get this increasing reopening of the economy. American. “
Technology was strong for much of the day, but slipped near market close, BlackBerry Ltd. gaining 1.9% and Shopify Inc. increasing 0.6%.
The Canadian dollar was trading at 82.74 US cents against 82.83 US cents on Thursday. However, Headland expects the loonie to move closer to the 85 cent mark.
In addition to being helped by crude oil prices, the currency has a strong correlation with the difference in two-year bond yields between the United States and Canada, Headland added.
âAs a market price in that sense, the Bank of Canada will hike rates ahead of the Federal Reserve, which puts a positive move on that two-year differential and that’s another positive push for the Canadian dollar.
“So the oil and two-year yield differential pushes the Canadian dollar higher and it should rise from here on out.”
This report by The Canadian Press was first published on May 28, 2021.