Equities in Canada’s biggest centre rose on Monday buoyed by energy and materials stocks, as signs of a pickup in demand made investors hopeful of a speedy economic recovery.
The S&P/TSX Composite Index fired out of the starting blocks, gaining 196.82 points, or 1.1%, to begin Monday, the week and the month at 17,533.84
The Canadian dollar squeaked up 0.03 cents to 78.13 cents U.S.
BMO raises price target on Parkland Corp. to $50.00 from $45.00. Parkland shares galloped 21 cents to $38.62.
Scotiabank cut the target price Premium Brands Holdings to $128.00 from $131.00. Premium acquired 21 cents to $104.72.
TD Securities cuts target price on Air Canada to $26.00 from $28.00. Air Canada shares docked three cents to $19.99.
On matters macroeconomic, the headline seasonally adjusted IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI®) registered 54.4 in January, down sharply from 57.9 in December. Despite moderating, the latest reading signalled a solid expansion in business conditions in the Canadian goods-producing sector.
Elsewhere, Canada, despite being the world’s biggest canola grower, is running short of the oilseed six months before the next harvest, with strong export demand driving prices to nearly 13-year highs last week.
ON BAYSTREET
The TSX Venture Exchange revived 26.01 points, or 2.8%, to 948.07.
All 12 TSX subgroups gained ground in the first hour of trade, with materials hiking 4%, gold spiking 3.9%, and energy rumbling ahead 1.7%.
ON WALLSTREET
Stocks climbed on Monday, the first session of February, as Wall Street appeared to shake off concerns about a speculative retail trading mania that largely drove the market’s worst weekly selloff since October.
The Dow Jones Industrials rebounded 95.53 points to open Monday at 30,078.15
The S&P 500 gained 19.35 points to 3,733.59, as 10 of the 11 sectors traded in the green.
The NASDAQ moved up 100.13 points to 13,170.83.
GameStop, the brick-and-mortar video game retailer that has been the center of attention on Wall Street, fell about 8%. Last week, the popular stock among retailer investors on Reddit forum WallStreetBets soared 400% amid extreme trading volume and volatility.
Many on Wall Street were spooked by a frenzy of activity among retail traders in heavily-shorted stocks including GameStop and AMC Entertainment, which caused hedge funds to take off risk across the board even if they weren’t directly involved in the trade.
Goldman Sachs said that the short squeeze triggered by the buying spree is the most extreme in 25 years. However, some strategists believe it’s unlikely that the impact will ripple through Wall Street and derail the new bull market.
The Reddit boom also seems to be spreading to other areas of the market. Futures contracts for silver surged 11%, the biggest one-day jump in 11 years. The Reddit chat room had multiple active threads dedicated to silver on Sunday night. The phrase ”#silversqueeze” was also trending on Twitter.
AMC jumped another 27% after a 277% rally last week.
Elsewhere, another busy week of earnings is coming up with 99 S&P companies set to report. Alphabet, Amazon, Alibaba, Snap, Exxon, Biogen, Pfizer and Chipotle are among the names set to report this coming week. Thursday is the busiest day of the earnings season.
Meanwhile, a group of 10 Republican senators sent President Joe Biden a letter on Sunday, urging him to consider a smaller, scaled-down COVID-19 relief proposal. His current plan calls for $1.9 trillion in additional fiscal stimulus.
The Republican proposal would reduce the size of a new round of checks Biden wants to send to Americans, from $1,400 per individual to $1,000. It would also make the income limits that determine eligibility for the stimulus payments far more strict. For individual filers the checks would start to phase out for those making more than $40,000.
Prices for 10-Year Treasurys were unchanged, keeping yields at Friday’s 1.08%.
Oil prices collected 42 cents to $52.62 U.S. a barrel.
Gold prices added $19.40 to $1,866.70 U.S. an ounce.