S&P/TSX composite hits record close, U.S. stock markets also higher

TORONTO – Canada’s main stock index moved up to hit a record close, while three indexes in New York all set new highs for the second consecutive day.

The S&P/TSX composite index advanced 54.40 points to 17,118.44, after going as high as 17,166.02 in earlier trading. It broke a previous closing record of 17,114.52 set on Nov. 28, 2019.

In New York, the Dow Jones industrial average rose 78.13 points to 28,455.09. The S&P 500 index added 15.85 points to 3,221.22, while the Nasdaq composite moved up 37.74 points to 8,924.96. All three American indexes continued their momentum from Thursday, when they also broke records, largely shrugging off news of U.S. President Donald Trump’s impeachment.

“With little in the way of major market-moving developments today or economic developments — central bank announcements, trade or political developments —markets are actually just maintaining that positive momentum,” said Candice Bangsund, vice president and portfolio manager of global asset allocation at Fiera Capital Corp.

She noted the momentum has been ongoing for the last several months.

“The investing environment right now is still thriving on the recent developments on the policy front,” she said.

Namely, that refers to an apparent resolution to some trade tensions between China and the U.S. after America’s Treasury Secretary Steve Munchin said Thursday that a preliminary trade deal would be ready for signing in early January.

For a good part of the year, markets were concerned the trade situation could evolve into a full-blown trade war, said Bangsund, which could derail global growth and spark a recession. The current environment now suggests the global outlook isn’t going to get worse, she said.

Additionally, investors had feared a hard Brexit. But, U.K. Prime Minister Boris Johnson’s landslide election win essentially ensures a smooth exit from the European Union, said Bangsund. Johnson’s party won 365 seats in the House of Commons for the party’s best performance since 1987.

“There’s a lot of positive momentum in the equity space,” said Bangsund.

“Investors are welcoming the improved clarity as we head into 2020 and as such are moving back into risky assets this week.”

The Canadian dollar traded for 75.96 cents US, down from an average of 76.21 cents US on Thursday. It was weighed down by disappointing retail sales data Friday, along with other weak economic data out earlier this week and a drop in the price of oil.

Statistics Canada said retail sales fell 1.2 per cent to $ 50.9 billion in October. Economists on average had expected an increase of 0.5 per cent, according to financial markets data firm Refinitiv.

That miss creates the expectation that the Bank of Canada will lower its key interest rate, she said.

The February crude contract dropped 74 cents to US$ 60.44 per barrel and the January natural gas contract gained 5.5 cents to roughly US$ 2.33 per mmBTU.

The February gold contract fell US$ 3.50 to US$ 1,480.90 an ounce and the March copper contract retreated about two cents to roughly US$ 2.81 a pound.

This report by The Canadian Press was first published Dec. 20, 2019.

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— With files from The Associated Press

Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)