TORONTO — Canada's main stock index started off the second half of the year in record territory as U.S. jobs gains point to a strong recovery in the months to come.
The S&P/TSX composite index returned from the Canada Day holiday to close up 60.53 points to 20,226.11, after hitting an intraday record of 20,338.45.
In New York, the Dow Jones industrial average was up 152.82 points at 34,786.35. The S&P 500 index was up 32.40 points to a record close of 4,352.34, while the Nasdaq composite was up 116.95 points at 14,639.33, also a record. The latter two markets also set all-time highs.
The day was affected by economic data on both sides of the border.
In the U.S. non-farm payroll numbers beat expectations with 850,000 jobs added in June, above the forecast of 706,000 and May's 559,000.
Canada posted a surprise trade deficit of $1.39 billion in May while the country's factory activity was a little disappointing, growing at the slowest pace in four months in June.
"Overall, on balance a decent day and I think the markets are reflecting that," said Colin Cieszynski, chief market strategist at SIA Wealth Management.
While Canadian data was weaker, he said most investors are focused on U.S. numbers that indicate the economy is still robust, with positive momentum heading into the second half of the year.
"And actually that is good for us longer term because I think Canada is lagging the U.S. overall by about three months and so if they've managed to keep their momentum going through the quarter, that's good for us as we go into the summer and we start reopening more up here," Cieszynski said in an interview.
The trade deficit was a little surprising, but many observers are chalking it up to lockdowns in Canada that are just starting to unwind.
Cieszynski said that attitude is a common with a lot of Canadian data, which eventually catch up to the U.S. which is further along in reopening.
"The strength of the U.S. is helping to cushion some of the blows of what negativity we are seeing in Canada. As long as their momentum has been good, the markets seem to be willing to overlook short-term weakness in Canada."
Health care was the only one of 11 major sectors on the TSX to drop on the day. It lost 2.5 per cent with shares of Aurora Cannabis Inc. falling 5.5 per cent, followed by Organigram Holdings Inc. at 5.4 per cent and Tilray Inc. at 5.1 per cent.
Consumer staples led the market, climbing 1.3 per cent as Alimentation Couche-Tard Inc. rose 2.8 per cent and Empire Co. Ltd. increased 2.4 per cent.
Hut 8 Mining Corp. surged 17.5 per cent to push the technology sector higher.
Materials and energy were both in positive territory.
Materials increased on a rise in gold and copper prices with Novagold Resources Inc. up 5.8 per cent.
The August gold contract was up US$6.50 at US$1,783.30 an ounce and the September copper contract was up four cents at US$4.28 a pound.
Energy was only slightly positive on continued gains in natural gas prices.
Crude oil dipped from Thursday's high but still remained above US$75 a barrel.
The August crude oil contract was down seven cents at US$75.16 per barrel and the August natural gas contract was up 3.9 at US$3.70 per mmBTU.
Whitecap Resources Inc. increased 2.4 per cent.
The Canadian dollar traded for 80.95 cents US compared with 80.68 cents US on Wednesday.
Despite Friday's gains, markets were relatively flat as many investors took the day off ahead of the Independence Day holiday for U.S. markets on Monday.
This report by The Canadian Press was first published July 2, 2021.
Companies in this story: (TSX:HUT, TSX:NG, TSX:WCP, TSX:ATD.B, TSX:EMP.A, TSX:ACB, TSX:OGI, TSX:TLRY, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press