Stocks Jump at Outset

·3 min read

Canada's main stock index rose on Thursday as heavyweight energy stocks tracked gains in oil prices, while hawkish signals from the Canadian and U.S. central banks cleared uncertainty over their policy tightening plans this year.

The S&P/TSX Composite hit the ground running, and gained 200.07 points, to kick off Thursday at 20,795.96.

The Canadian dollar shed 0.12 cents at 78.89 cents U.S.

RBC raised the target price on AG Growth International to $45.00 from $42.00. AG shares captured $1.06, or 3.3%, to $33.15.

Citigroup raised the price target on Cenovus Energy to $21.00 from $17.00. Cenovus shares gained 46 cents, or 2.5%, to $18.83.

ATB Capital Markets raised the target price on Enerflex to $12.50 from $12.00. Shares in Enerflex strode forward 17 cents, or 2.6%, to $6.76.

On the economic calendar, Statistics Canada said the number of employees receiving pay or benefits from their employer rose by 37,200 (+0.2%) in November, the sixth consecutive monthly increase, bringing it to within 0.4% of its pre-pandemic level.

Moreover, The Bank of Canada will soon start hiking interest rates from record lows to combat inflation, Governor Tiff Macklem announced on Wednesday, saying the economy no longer needed help to deal with the effects of the COVID-19 pandemic.

ON BAYSTREET

The TSX Venture Exchange regained 2.09 points to 848.38.

All but one of the 12 TSX subgroups progressed, with energy ahead 2.5%, consumer discretionary stocks up 1.8%, and communications better by 1.5%.

Only gold missed the party, down 0.3%.

ON WALLSTREET

U.S. stocks rose Thursday as investors mulled over a better-than-expected fourth-quarter GDP report and an update from the Federal Reserve on its rate hike plan.

The Dow Jones Industrials popped 455.12 points, or 1.3%, to 34,623.21.

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The S&P 500 recovered 57.98 points, or 1.3%, to 4,407.91.

The NASDAQ surged 139.10 points, or 1%, to 13,681.22.

Netflix jumped more than 8% on news that Pershing’s Bill Ackman bought 3.1 million shares. ServiceNow surged 11.7% after better-than-expected quarterly results.

On the downside, Intel lost 6% and Tesla fell 5% despite a strong earnings report. Robinhood dipped 2% ahead of reporting quarterly results after the closing bell.

Investors continued to digest the latest update on monetary policy as the Federal Open Market Committee strongly indicated the first interest rate hike since late 2018 could come as soon as March.

Fed Chairman Jerome Powell rattled markets Wednesday saying the central bank has "quite a bit of room" to raise rates before negatively impacting employment.

Fourth-quarter gross domestic product jumped 6.9% from the year prior, the Commerce Department reported Thursday. Economists surveyed by Dow Jones expected the economy grew at a 5.5% annualized pace in the final three months of 2021.

Prices for 10-year Treasurys gained ground, lowering yields to 1.81% from Wednesday’s 1.87%. Treasury prices and yields move in opposite directions.

Oil prices added 33 cents to $87.68 U.S. a barrel.

Gold prices lost $25.20 to $1,804.50 U.S. an ounce.


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