TORONTO 鈥� North American stock markets rebounded Friday after a difficult week, though the price of oil continued its slide on concerns over the COVID-19 Delta variant.
Canada鈥檚 main stock index ended a streak of six straight sessions of losses Friday. The S&P/TSX composite index was up 123.66 points at 20,339.02.
U.S. markets also ticked up Friday. In New York, the Dow Jones industrial average was up 225.96 points at 35,120.08. The S&P 500 index was up 35.87 points at 4,441.67, while the Nasdaq composite was up 172.87 points at 14,714.66.
The improving sentiment was largely due to comments made Friday by Dallas Federal Reserve President Robert Kaplan, said Manulife Investment Management chief investment strategist Philip Peturrson.
Kaplan鈥檚 comments 鈥� 聽suggesting he may not be as eager as he once was to see the U.S. Central Bank begin scaling back its bond buying program 聽鈥� were seen as good news by the equity markets, Peturrson said. The expected tapering of pandemic emergency relief programs by the U.S. Federal Reserve had been making investors jittery all week, Peturrson said.聽
鈥淟argely the week was driven by uncertainty," Peturrson said. "Uncertainty around the direction of economic strength, uncertainty around the potential for taper. And today we had a bit more clarity."
However, while stock indexes improved Friday, oil continued its slide 鈥� falling to its lowest level since May. The October crude oil contract was down US$1.36 at US$62.14 per barrel.
Oil is extremely vulnerable to negative headlines about COVID-19, as public health lockdowns anywhere on the globe have a significant impact on fuel demand. While oil had risen to a seven-year high in July as countries loosened public health restrictions, this week's news about surging cases of the Delta variant in North America and around the world is dragging it down again, Peturrson said.
鈥淓nergy had a great run, from the start of the year up until really a couple of weeks ago," he said. "Now we鈥檙e just seeing a bit of a correction."
The September natural gas contract was up two cents at US$3.85 per mmBTU.
The December gold contract was up 90 cents at US$1,784.00 an ounce and the September copper contract was up almost 10 cents at US$4.14 a pound.
Peturrson said while weaker-than-expected economic data this week 鈥� such as sluggish retail sales figures out of the U.S. 鈥� are having an impact on markets, it doesn't mean the economy is heading back to 2020 conditions. It just means the pace of recovery is slowing right now, he said.
"I don鈥檛 think that means this is it for either the commodities rally or the equity rally," Peturrson said. "I think we can see both continue. We just have to get past this latest bump in the road.鈥�
This report by The Canadian Press was first published Aug. 20, 2021.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Amanda Stephenson, The Canadian Press
