Canada’s main stock index rose for a sixth straight day on Thursday, with resource and technology stocks leading a broad-based rally as U.S. economic data bolstered hopes of a soft landing for the economy.
The S&P/TSX composite index ended up 272.71 points, or 1.2%, at 23,032.72, stopping just short of its record closing high on July 31. The daily winning streak was the longest since July 2023.
The number of Americans filing new applications for unemployment benefits dropped to a one month-low last week and retail sales jumped 1.0% in July, which was the largest increase since January 2023.
The data indicates that “we still have resilient economic growth,” said Angelo Kourkafas, a senior investment strategist at Edward Jones. “And when you combine that with moderating inflation, that is the recipe for a soft landing.”
The latest U.S. consumer price index data, released on Wednesday, showed the annual increase in inflation slowing to below 3% for the first time since early 2021.
All 10 major sectors moved higher, including a gain of 2.7% for technology as shares of Celestica Inc and Shopify Inc climbed.
Energy added 1.7% as U.S. crude oil futures settled 1.5% higher at $78.16 a barrel.
Gold and copper prices also rose, which helped lift the materials group. It ended up 1.6%.
Canadian Labour Minister Steven MacKinnon has rejected a request by Canadian National Railway Co to initiate binding arbitration in a labor dispute with the Teamsters union, a spokesman for the minister said.
Still, shares of CN Rail and Canadian Pacific Kansas City Ltd both ended up 1.9%
\Wall Street’s main indexes closed higher on Thursday, with the Nasdaq rising more than 2% after July U.S. retail sales data signaled resilient consumer spending, allaying fears of an imminent recession in the world’s largest economy.
Retail sales increased 1.0% after a downwardly revised 0.2% drop in June, easing fears of a sharp economic slowdown fanned by a jump in the unemployment rate last week.
Retail bellwether Walmart rose after raising its annual profit forecast for the second time this year as Americans flocked to its stores for inexpensive essentials.
Rivals Target and Costco also advanced.
A separate reading also showed the number of Americans filing new applications for unemployment benefits fell unexpectedly last week.
“The wall of worry is beginning to crumble as sentiment is improving and the fundamentals support a risk-on bias,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “Retail sales were above expectations, Consumer Price Index numbers came in at a tolerable level, so the fundamental backdrop is consistent with rising equity prices.”
The yield on two-year and 10-year Treasury notes rose after the data, with traders increasing bets for a 25-basis-point rate cut by the Federal Reserve to 76.5%, versus 65% before the data.
Investors have cautiously eyed this week’s economic data releases, the last set before Fed Chairman Jerome Powell delivers a much-awaited speech at Jackson Hole next week.
According to preliminary data, the S&P 500 gained 88.41 points, or 1.62%, to end at 5,543.62 points, while the Nasdaq Composite gained 399.12 points, or 2.32%, to 17,591.72. The Dow Jones Industrial Average rose 555.56 points, or 1.39%, to 40,563.95.
Among other movers, Cisco Systems rose after it forecast better-than-expected first-quarter revenue and said it was cutting 7% of its global workforce.
Nike climbed as billionaire investor William Ackman built new stakes in the sportswear company. Ulta Beauty jumped after Warren Buffett’s Berkshire Hathaway acquired a stake in the cosmetics store chain.
Reuters