TORONTO — Canada's main stock index rose more than 150 points with broad-based gains led by financials, health care and metals, while U.S. markets posted strong gains as tech stocks continued to impress during earnings season.
“This has been the big week for earnings” in the U.S., said John Zechner, chairman and lead equity manager at J. Zechner Associates.
The biggest names in tech have been reporting good news for investors, with more to come this week, said Zechner.
Shares in Meta were up almost 14 per cent Thursday after the Facebook parent company reported earnings blew past expectations, helping pull Wall Street up in its best day since January.
In New York, the Dow Jones industrial average was up 524.29 points at 33,826.16. The S&P 500 index was up 79.36 points at 4,135.35,while the Nasdaq composite was up 287.89 points at 12,142.24.
“Microsoft carried the day yesterday, Meta sort of carries it today,” Zechner said.
However, Zechner said many of cyclical stocks aren’t getting as much love as the tech picks despite also reporting decent earnings. It’s been a “mixed bag” overall so far, but basic staples have been doing well, he said.
A mixed bag of economic data paints a muddy picture of how the market is faring amid high interest rates. U.S. GDP figures showed the economy slowed significantly from January through March, but consumer spending remained resilient and applications for unemployment fell last week.
“I think investors were positioned bearishly, but maybe they're seeing, ‘Hey, we can have our cake and eat it too,’” he said. “The economy’s slowing but earnings really aren't getting decimated.”
However, Zechner said the full effects of rate hikes have yet to be felt.
“Just because it hasn't happened yet, doesn't mean it won't happen. And it's hard to imagine that you don't get something close to a recession, if not a full-out recession from this kind of tightening of policy,” he said.
Markets are largely pricing in a hike of a quarter of a percentage point at the Federal Reserve’s interest-rate decision next week, said Zechner, but the big question is what happens after that.
North of the border, the S&P/TSX composite index posted softer gains, up 155.92 points at 20,522.64.
The Canadian dollar traded for 73.46 cents UScompared with 73.39 cents US on Wednesday.
The June crude contract was up 46 cents at US$74.76 per barrel and the June natural gas contract was up five cents at US$2.36 per mmBTU.
The June gold contract was up US$3.00 at US$1,999.00 an ounce and the July copper contract was up two cents at US$3.88 a pound.
— With files from Associated Press
This report by The Canadian Press was first published April 27, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
