North American stock markets continue record runs after last week's economic gains

·4 min read

TORONTO — The afterglow of last week's economic and employment gains propelled North American stock markets further along their record runs.

The S&P/TSX composite index was up 100.72 points to a record close of 21,556.54 after peaking at 21,585.55 earlier in the day.

In New York, the Dow Jones industrial average increased 104.27 points at 36,432.22, while the Nasdaq composite was up 10.77 points at 15,982.36.

The S&P 500 index advanced 4.17 points to surpass 4,700 for the first time, closing at 4,701.70 for an eight-day run that is the longest winning streak since 2017.

"Smaller gains today, but we are seeing some follow-through buying from last week," said Angelo Kourkafas, investment strategist at Edward Jones.

Specifically, he said sentiment seems buoyed by a somewhat dovish U.S. Federal Reserve, solid U.S. jobs report for October and strong corporate earnings in both Canada and the U.S. It was followed by congressional approval of an infrastructure bill and promising news on Merck's COVID-19 treatment pill.

"Behind all of this optimism is that we have seen the recent headlines and economic data. Both of these things have given plenty of reasons for the markets to add to these hefty year-to-date gains," he said in an interview.

The Toronto-based market is up 23.7 per cent so far in 2021 with the historically strong final two months of the year to come.

After losing some ground during September, markets have increased seven per cent since the beginning of October.

Despite its US$1 trillion price tag, the bipartisan infrastructure bill passed late Friday after being stalled in the House of Representatives since August is less significant than the massive stimulus pumped into the economy over the last two years, Kourkafas said.

Still, he said the infrastructure deal could increase productivity long-term if it is well-targeted.

"This is a positive as we finish the year and think about what might lie ahead," he said, referring to a reacceleration of economic activity.

"We see strong demand and that's really the underpinning of the corporate earnings that have been exceeding expectations. And definitely the news about the COVID-19 treatments, all this medical improvement, is one more reason to be optimistic."

Eight of the 11 major sectors on the TSX were higher Monday, all up more than one per cent.

Health care led, climbing eight per cent as cannabis producers Cronos Group Inc. surged nearly 26 per cent, Tilray Inc. rose 16 per cent and Canopy Growth Corp. was up almost 11 per cent.

Telecommunications increased 1.3 per cent. Shares of Rogers Communications Inc. increased three per cent and Shaw Communications Inc. were up 2.3 per cent after a B.C. court ruled Friday that Rogers chairman Edward Rogers was legally justified in unilaterally replacing the telecom giant's board of directors.

Energy, technology and materials were each up about 1.2 per cent.

Energy gained with Cenovus Energy Inc. up 4.2 per cent and Vermilion Energy Inc. up 3.9 per cent as the price of crude oil continued to rise after OPEC and its allies rejected U.S. President Joe Biden's request for more output in a bid to stem gasoline price increases.

The December crude oil contract was up 66 cents at US$81.93 per barrel and the December natural gas contract was down 8.9 cents at US$5.43 per mmBTU.

The Canadian dollar traded for 80.33 cents US compared with 80.31 cents US on Friday.

Hut 8 Mining Corp. rose 9.6 per cent to lead the tech sector while materials was helped by gold — a hedge against inflation — continuing to swell ahead of the release of new U.S. inflation numbers.

The December gold contract was up US$11.20 at US$1,828.00 an ounce and the December copper contract was up 5.6 cents at US$4.40 a pound.

This report by The Canadian Press was first published Nov. 8, 2021.

Companies in this story: (TSX:HUT, TSX:CRON, TSX:TLRY, TSX:WEED, TSX:CVE, TSX:VET, TSX:RCI.B, TSX:SJR.B, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

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