TORONTO — The tech-heavy Nasdaq composite set new records Tuesday while other stock markets rose after U.S. President Donald Trump confirmed a trade deal with China remains in tact.
Markets were headed for a rough day after White House trade adviser Peter Navarro suggested late Monday that the trade deal was in trouble, before Trump’s clarifying tweet.
“I think if anything it’s just a sign of the knife edge that the market is resting on,” said Craig Jerusalim, portfolio manager at CIBC Asset Management.
“It was ready to pull back sharply if Navarro’s comments were true and clearly after Trump’s all-clear the futures market recovered before equity markets opened up this morning, so it was crisis averted on that front.”
The S&P/TSX composite index closed up 47.85 points at 15,564.75.
In New York, the Dow Jones industrial average was up 131.14 points at 26,156.10. The S&P 500 index was up 13.43 points at 3,131.29, while the Nasdaq composite climbed 74.89 points to a record close of 10,131.37 after hitting an intraday record of 10,221.85.
Nasdaq moved on increases from large cap stocks including Apple Inc. which rose more than two per cent to reach a new peak.
In Canada, Shopify Inc. tried to keep up, but gained $9 or 0.7 per cent while other tech names did better.
They benefited from Trump’s clamp-down on work visas Monday. His administration extended a ban on green cards issued outside the U.S. until the end of the year and added many temporary work visas to the freeze — including those used heavily by technology companies and multinational corporations.
“Canada’s tech sector is going to be the big beneficiary of some of those high-skilled workers coming to Canada instead,” Jerusalim said in an interview.
The TSX trailed U.S. markets because tech-related stocks make up a smaller part of the overall market in Canada.
Eight of the 11 major sectors on the TSX climbed, led by energy and materials. Energy gained nearly two per cent even though crude oil prices slipped after surpassing US$41 a barrel.
Shares of MEG Energy Corp. and Whitecap Resources Inc. increased 7.8 and 6.6 per cent respectively.
The August crude contract was down 36 cents at US$40.37 per barrel and the August natural gas contract was down 4.7 cents at US$1.69 per mmBTU.
Materials was up 1.25 per cent as gold prices hit their highest level in nearly nine years.
The metal was helped by a lower U.S. dollar and it being a hedge against fears about a surge in COVID-19 cases in American cities.
“There is that big concern on the horizon being the reopening of the economy causing COVID case counts to increase…but right now people are cheering the potential for getting back to normal,” said Jerusalim.
The August gold contract was up US$15.60 at US$1,782.00 an ounce and the July copper contract was down 0.6 of a cent at nearly US$2.66 a pound.
Jerusalim said markets move up because of a combination of low interest rates and the flow of money out of fixed income and cash that’s sitting on the sidelines into equities.
Grocers pushed consumer staples lower with Empire Co. Ltd. down 3.2 per cent, while industrials slipped on a 2.9 per cent drop in Air Canada shares a day after it again bolstered its liquidity position.
The Canadian dollar traded for 73.99 cents US compared with 73.83 cents US on Monday.
Economic data in Europe and the U.S. was less discouraging, with manufacturing and servicing PMI still contracting but on an improving trend.
U.S. housing sales, however, were strong and beat analyst expectations.
This report by The Canadian Press was first published June 23, 2020.
with a file from The Associated Press
