S&P/TSX composite index up more than 400 points after sharp reversal
Canada’s main stock index rose more than 400 points after an early plunge, while US stock markets also recovered significantly from the decline.
The S&P/TSX Composite Index gained 407.35 points or 2.4% to 18,613.63, rebounding from losing more than 300 points at the market open.
Michael Currie, senior investment adviser at TD Wealth Management, said today’s market was taken aback by much-anticipated inflation data out of the United States, which beat expectations – in the wrong way.
“We had higher than expected US inflation numbers, which no one wants to see. They exceeded all economists’ expectations.
Inflation accelerated in the United States, with consumer prices up 6.6% in September year-on-year, excluding volatile food and energy costs.
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In New York, the Dow Jones industrial average rose 827.34 points or 2.8% to 30,038.19. The S&P 500 index rose 92.88 points or 2.6% to 3,669.91, while the Nasdaq composite rose 232.05 points or 2.2% to 10,649.15.
« Almost everything on the screen is green. And so anybody who jumped on the bandwagon this morning and started throwing themselves on the news, there’s really a lot of pain right now, » Currie said.
Investors could be on a bargain hunt upon learning that the market has hit new yearly lows, he speculated.
« Hopefully the market finds a bottom here, » he said.
However, the gains posted on Thursday could easily be reversed in future sessions, much like what happened in early October, Currie said.
« When you see moves that aggressive, either up or down, they’re usually not sustainable, » he said.
Clearly a pivot on interest rate hikes is now out of the question for the Fed and Bank of Canada, Currie said.
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“Black on white, the news was negative today. That’s not what we wanted,” he said.
The Canadian dollar was trading at 72.43 cents US against 72.45 cents US on Wednesday.
The November crude contract rose $1.84 to US$89.11 per barrel and the November natural gas contract rose 30.6 cents to US$6.74 per mmBTU.
Oil rose for the first time in four sessions on Thursday, Currie noted, likely due to Energy Information Administration data showing a drop of nearly five million barrels in distillate supplies, raising concerns about the supplies as winter approaches.
The December gold contract was down 50 cents at US$1,677 per ounce and the December copper contract was up 1.6 cents at US$3.44 per pound.
— With files from the Associated Press
© 2022 The Canadian Press
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