TORONTO β North American equity markets continued to bounce back from last week's dismal performances, with recovering oil prices helping lift Canada's main stock market just shy of an all-time high.
Allan Small, senior investment adviser at IA Private Wealth, said stock markets are still benefitting from a βbuy the dipβ mentality that has existed throughout the pandemic, as more stable options like bonds bring unimpressive returns.Β
"There's nowhere really else to put your money β where are you going to put your money, a five- or 10-year bond making under two per cent?" said Small.
"Investor aren't interested in putting their money in something that's not even keeping up with inflation, so really the only place to put your money in these days... is the markets."
Monday and Tuesday's gains are a change from last weekβs losing streak, where the S&P/TSX suffered six straight sessions of losses before ticking up slightly on Friday.Β
On Tuesday, the S&P/TSX composite index was up 70.50 points at 20,547.76, just below its highest ever close at 20,554.01.
In New York, the Dow Jones industrial average was up 30.55 points at 35,366.26. The S&P 500 index was up 6.70 points at 4,486.23, while the Nasdaq composite was up 77.15 points at 15,019.80.
Energy prices also enjoyed a recovery, with crude oil bouncing back after hitting itβs lowest level since late-May. The October crude oil contract was up US$1.90 at US$67.54 per barrel and the October natural gas contract was down 4.4 cents at nearly US$3.92 per mmBTU.
"Once you see oil getting up close to US$70, I think people start to realize that it's getting a little bit too far ahead of itself," said Small.
"And when it gets to the low 60s, that may be too low based on an economy around the world that, even though it's facing higher COVID-19 numbers, the economy is still growing. There's kind of that sweet spot for oil."
Small said positive financial results from the Bank of Nova Scotia and the Bank of Montreal were notable developments in Canada.
He said BMO's numbers in particular were strong, with loan-loss provisions coming down notably as the bank benefits from a resurgence in the economy. He said Scotiabank had good numbers too, though not as good as BMO.
"Scotiabank, many of us believe that because they have more business outside of the United States and Canada that they'll be struggling more."
Scotiabank's stock was down 0.79 per cent to 79.60 Tuesday, while BMO was up 1.67 per cent to 130.87.
In the U.S., Small pointed to "fantastic" quarterly results from Best Buy as a positive sign for retailers, as North American economies show resilience against rising COVID-19 case counts.Β
That stock jumped 8.32 per cent Tuesday to US$121.49.
Commodities also enjoyed a positive day, with the December gold contract up $2.20 cents at US$1,808.50 an ounce and the September copper contract up 2.1 cents at nearly US$4.26 a pound.
The Canadian dollar traded for 79.31 cents US compared with 78.85 cents US on Monday.
This report by The Canadian Press was first published Aug. 24, 2021.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Salmaan Farooqui, The Canadian Press
