TORONTO — Canada's main stock index inched up to a new high to start the trading week ahead of the release of U.S. inflation numbers that could solidify central bank responses.
"A key highlight of the week will be the consumer price index and inflation release in the U.S. and that'll really I think set the mood, set the tone for this week," said Angelo Kourkafas, investment strategist at Edward Jones.
The Federal Reserve will meet next week where tapering of monetary stimulus is expected to be discussed, although no action is foreseen before year-end of early 2022.
"The last thing that the central banks in general want to do is to surprise markets and that's why they'll take a very gradual approach and they start dropping hints … which in our view is justified to have a discussion now given the strength of the recovery," Kourkafas said in an interview.
Central bankers will be watching Wednesday's inflation numbers closely, Kourkafas said in an interview.
The Bank of Canada decision the same will likely maintain the bank's tapering of bond purchases for now, especially after the May jobs report released Friday indicated a loss of momentum, he added.
The S&P/TSX composite index added 6.11 points to a record close of 20,035.30 after hitting intraday record of 20,067.19.
In New York, the S&P 500 index also hit an intraday record but closed down 3.37 points at 4,226.52. The Dow Jones industrial average was down 126.15 points at 34,630.24, while the Nasdaq composite was up 67.23 points at 13,881.72.
The smaller daily market movements indicate that investors continue to grapple with a tug of war between growth and inflation and also the potential for higher interest rates.
"I don't think there's too much to read into this. More I would consider today's price action as a breather, which is normal following such strong moves in equity markets."
Economic reopenings and earnings momentum continue to be driving forces. Ontario indicated Monday that it will start to loosen restrictions on Friday, earlier than it previously planned.
Similar moves in Europe, elsewhere in Canada and in the United States are driving demand for energy and helped crude prices to reach US$70 per barrel for the first time since October 2018.
Still, the July crude oil contract settled down 39 cents at US$69.23 per barrel and the July natural gas contract was down 2.7 cents at US$3.07 per mmBTU.
The energy sector dipped with shares of Crescent Point Energy Corp. lost 2.8 per cent.
The Canadian dollar traded for 82.83 cents US compared with 82.75 cents US on Friday.
Materials was also lower despite higher gold prices as shares of Hudbay Minerals Inc. fell 5.5 per cent.
The August gold contract was up US$6.80 at US$1,898.80 an ounce and the July copper contract was down 0.25 of a cent at nearly US$4.53 a pound.
Health care was the top sector, climbing four per cent as shares of Trillium Therapeutics Inc. rose 16.4 per cent. The gains were triggered after the Food and Drug Administration approved a Biogen drug for treating Alzheimer's disease, the first such approval in nearly 20 years.
Aurora Cannabis Inc. increased 7.9 per cent while Canopy Growth Corp. was up 5.7 per cent.
Technology increased 1.2 per cent as shares of BlackBerry Ltd. surged 13.6 per cent. The Waterloo, Ont., company is part of the so-called "meme stocks" including AMC Entertainment and GameStop that have seen meteoric increases again, driven by retail investors.
This report by The Canadian Press was first published June 7, 2021.
Companies in this story: (TSX:BB, TSX:CPG, TSX:TRIL, TSX:ACB, TSX:WEED, TSX:HBM, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press