TORONTO - Canada's main stock index jumped more than 350 points Friday, driven by gains in energy, industrials, financials and metals. Meanwhile, U.S. stock markets also rose after the latest round of jobs data showed better-than-expected hiring for the month of May even as unemployment rose and wage pressure eased.
The S&P/TSX composite index closed up 352.38 points, or 1.79 per cent, to 20,024.63.
In New York, the Dow Jones industrial average was up 701.19 points, or over two per cent, to 33,762.76. The S&P 500 index increased by 61.35 points to 4,282.37,while the Nasdaq composite grew 139.78 points to 13,240.77.
鈥淚 think it鈥檚 just in some ways an oversold bounce,鈥 said John Zechner, chairman and lead equity manager at J Zechner Associates.
鈥淚 mean, you stretch a rubber band too far in one direction, and you鈥檙e going to snap it back a little bit the other way at some point.鈥
The markets have been quite narrow in recent months, said Zechner, noting that on the S&P 500, just a handful of tech giants gained while the rest were down, leading to a flat month for the index.
鈥淓verything that's been going down lately has been the cyclical stocks 鈥 because they're all worried about an economic downturn.鈥
But new jobs data seems to have prompted a 鈥渃omplete reversal鈥 of the trend for most of the year so far, with the Nasdaq trailing the other U.S. indexes Friday, said Zechner.
However, it remains to be seen whether Friday鈥檚 optimism is 鈥渁 flash in the pan鈥 or a longer-term move toward cyclicals, he said.
The TSX, which is much more heavily weighted toward cyclicals than tech, also rose Friday. The energy index rose almost three per cent, while both financials and industrials rose by more than two per cent.
鈥淚t鈥檚 the polar opposite of what we鈥檝e seen for certainly in May, but for a lot of this year,鈥 said Zechner.
With the debt-ceiling deal passed, that situation has all but faded from sight for investors, who are all eyes and ears on interest rates, said Zechner.
June 13 will see the latest inflation print out of the U.S., a key figure ahead of the Federal Reserve鈥檚 upcoming meeting. Zechner said with economic data on both sides of the border giving mixed messages 鈥 for example, Friday鈥檚 job print saw unemployment tick up even as jobs grew 鈥 expectations are growing for both central banks to raise rates again, though not necessarily in June.
鈥淚n order to get it down to this two per cent target, it鈥檚 going to take a little bit more work,鈥 he said.
鈥淲e鈥檙e rolling over slowly 鈥 but the consumer is still hanging in for now.鈥
Some investors are still buying into the Goldilocks scenario for the economy, said Zechner, but he doesn鈥檛 think that鈥檚 the most likely outcome. However, economic data like Friday鈥檚 jobs print certainly injects more of that hope into the market, he said.
鈥淕oldilocks was absolutely alive today.鈥
The 春色直播 dollar traded for 74.43 cents US compared with 74.17 cents US Thursday.
The July crude contract was up US$1.64 at US$71.74 per barrel and the July natural gas contract was up a penny at US$2.17 per mmBTU.
The August gold contract was down US$25.90 at US$1969.60 an ounceand the July copper contract was up two cents at US$3.73 a pound.
This report by 春色直播was first published June 2, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
