Canada Stocks-TSX posts biggest weekly gain in four months as Fed rate-hike bets ebb
SPY•TSX closes at another record high
Canada's main stock index rose to another record high on Friday, led by mining and real estate shares, as a surprise decline in U.S. employment last month cast doubt on a September interest-rate hike by the Federal Reserve.
The Toronto Stock Exchange's S&P/TSX Composite Index .GSPTSE ended up 244.92 points, or 0.7%, at 36,381.23, eclipsing Wednesday's record closing high. For the week, the index added 3.3%, its biggest weekly advance in four months.
U.S. payroll weakness boosts rate-cut bets
- U.S. nonfarm payrolls decreased by 23,000 last month and payrolls for the prior two months were revised sharply lower.
- "U.S. is what's driving the market ... so a weak number, which normally you would say is not good, but bad news is good news in this case," said Allan Small, senior investment adviser of the Allan Small Financial Group with iA Private Wealth.
- Canada's jobs report was more upbeat, with employment jumping by 75,100 positions and the jobless rate falling for the third consecutive month. Still, the data did not alter expectations for the Bank of Canada to leave its benchmark interest rate on hold at 2.25% in September.
Mining and real estate lead, energy and financials lag
- The materials group .GSPTTMT, which includes metal mining shares, rose 4.7% as gold XAU= climbed to a seven-week high on reduced Fed rate-hike expectations.
- B2Gold Corp BTO.TO shares jumped 22.5% and IAMGOLD Corp IMG.TO was up 13.7% after both companies reported quarterly results.
- The rate-sensitive real estate sector .GSPTTRE was another standout, adding 1.1%.
