North American markets post Santa Claus rally despite oil weakness while loonie falls

TORONTO -- North American markets posted a so-called Santa Claus rally on Monday despite another fall in the price of oil that dragged the loonie down to its lowest level since August 2003.

See Full Article

The Toronto Stock Exchange's S&P/TSX index rose 10.08 points to end the day to 13,034.38 after adding 14 points on Friday.

Craig Fehr, Canadian market strategist at Edward Jones in St. Louis, said the focus for investors now is on monetary policy in the wake of the interest rate hike by the U.S. Federal Reserve last week and how that could impact the price of oil.

He said the performance of the Toronto market could diverge from the returns on the New York markets over the next few weeks as investors weigh the impact of weak oil prices on the commodity-weighted Canadian index.

"I expect it will refocus back on earnings as we turn the page to next year," he said.

The Dow Jones average of 30 stocks rose 123.07 points to close at 17,251.62, the broader S&P 500 index advanced 15.60 points to 2,021.15 and the Nasdaq gained 45.84 points to 4,968.92.

Fehr said the returns looked like a Santa Claus rally, the seasonal gain in stock prices usually observed in the last two weeks of the year that some credit to Christmas bonuses and tax-loss selling and others to holiday goodwill along Bay and Wall Streets and vacation time for the most pessimistic Grinches on the trading desks.

Oil prices slid again, falling 25 cents to settle at US$35.81 per barrel. The price has plumbed 11-year lows since falling from above US$41 earlier this month after OPEC said it would maintain its near-maximum production levels for the next six months even as a worldwide supply glut shows no signs of easing.

Oil has dropped from a high above US$110 in July 2014 as OPEC and other producers have pumped up supply while demand from big consumers such as China has sagged.

"Perhaps the path of least resistance for oil prices in the very near term is lower until we see a decisive shift in one or the other, that being supply or demand," Fehr said.

The commodity-sensitive loonie fell 0.1 of a cent to 71.61 cents US, its lowest level since August 2003.

Fehr said there wasn't clear direction for the Canadian dollar in the near term.

"The Canadian economy is going to continue to face a mixture of headwinds and tailwinds, while there are far more tailwinds for the U.S. economy," he said.

In other commodities, the February gold contract rose $15.60 to US$1,080.60 per troy ounce, and the January contract for natural gas added 14.4 cents to end trading at US$1.911.



Advertisements

Latest Economic News

  • Air Miles raises cap on in-store redemptions

    Economic Toronto Sun
    TORONTO — Air Miles is raising some of the recent daily limits imposed on redeeming miles for in-store purchases from retailers. The customer loyalty program says the new daily limit on Air Miles Cash redemptions, in most cases, has been raised to $100. Source
  • Disgruntled U.S. Tim Hortons franchisees follow Canadian example, form alliance

    Economic CTV News
    TORONTO - A group representing Tim Hortons franchisees who are unhappy with the management of the coffee-and-doughnut chain says it now has a U.S. chapter, a development that could put further pressure on the parent company. Source
  • Canada, China sign no-hacking agreement designed to protect trade secrets

    Economic CTV News
    OTTAWA -- Canada and China have agreed not to engage in state-sponsored hacking of each other's trade secrets and business information. The two countries reached the agreement during a meeting last week that was part of their new high-level national security dialogue. Source
  • Coal on the rise in China, U.S., India after major 2016 drop

    Economic CTV News
    BEIJING -- The world's biggest coal users -- China, the United States and India -- have boosted coal mining in 2017, in an abrupt departure from last year's record global decline for the heavily polluting fuel and a setback to efforts to rein in climate change emissions. Source
  • Ontario needs innovative skills and apprenticeship training:study

    Economic CTV News
    TORONTO - A new study concludes that Ontario needs to get far more creative in order to properly prepare young people for jobs of the future. The study was commissioned by the Ontario Skilled Trades Alliance which represents companies that employ more than 400,000 skilled trades people across the province. Source
  • Air Miles raises cap on in-store redemptions effective Monday

    Economic CTV News
    TORONTO - Air Miles is raising some of the recent daily limits imposed on redeeming points for in-store purchases from retailers. The customer loyalty program sent notices during the weekend that says the new daily limit on Air Miles Cash redemptions, in most cases, has been raised to $100. Source
  • Portugal airline chief fears increasing drone near-misses

    Economic CTV News
    LISBON, Portugal -- Portugal's national airline chief said Monday he is considering asking authorities to order that all drones in the country be grounded, following a series of near-misses with commercial aircraft. If drones "keep entering airspace, we're going to call for them to be grounded," TAP Air Portugal President Fernando Pinto said. Source
  • Garbage piles mount in Greek capital as heatwave looms

    Economic CTV News
    ATHENS, Greece -- With a heat wave expected later this week, Greece's government on Monday failed to persuade striking garbage collectors to return to work after a 10-day protest left huge piles of trash around Athens. Source
  • Advice for retirees who must answer the question: Buy, sell or rent?

    Economic CTV News
    It wasn't that long ago when the outlook for retirees focused on baby boomers downsizing and moving into smaller homes in the country -- trading an urban lifestyle with a relaxing, rural retirement. Fast forward 20 years, and many retirees are opting to stay in their homes for longer: renovating, upgrading and improving accessibility along the way. Source
  • Shkreli defies advice to keep quiet before fraud trial

    Economic CTV News
    NEW YORK -- "Pharma Bro" just won’t keep his mouth shut. Even with his federal securities fraud trial set to begin Monday, Martin Shkreli has blatantly defied his attorneys’ advice to lay low. The former pharmaceutical CEO, who became a pariah after raising the cost of a life-saving drug 5,000 per cent, has been preening for cameras and trolling on social media, potentially complicating his defence. Source