North American markets and loonie rally on oil prices

TORONTO -- North American stock markets rallied strongly Tuesday, helped by rising oil prices and improved investor sentiment, while encouraging economic data from Ottawa gave the Canadian dollar a solid boost.

See Full Article

Toronto's S&P/TSX composite index climbed 121.75 points to 12,982.10, capping a fourth straight day of gains.

Energy, metals and mining, utilities and financial stocks all helped the commodity-heavy index. Gold was the main drag, losing nearly five per cent.

Much of the strength was linked to another rise in oil prices after Russia hinted that a deal to cap oil production could be reached by OPEC countries later this month.

Saudi Arabia, Russia, Venezuela and Qatar have supported the idea of limiting supply, with the aim of boosting prices, but have said it is conditional on agreement by other producers. So far, Iran has refused to go along, saying it wants to return to pre-sanction production levels.

Even so, Sadiq Adatia, chief investment officer at Sun Life Global Investments, says word of an impending deal is enough to quiet some investor fears that oil prices will fall much further.

It also is a sign that if the largest oil-producing countries can agree to a cap, then they might eventually also agree to a production cut.

"We're seeing step one here (towards a cut) as long as everyone participates," Adatia said.

The April contract for benchmark North American crude added 65 cents to settle at US$34.40 a barrel.

Higher oil prices are usually read by investors as a sign of strong economic growth.

The gain in crude also helped push the Canadian dollar higher, with the loonie adding on 0.65 of a U.S. cent to 74.55 cents U.S.

The currency was also helped after Statistics Canada reported that the economy expanded at an annual rate of 0.8 per cent in the final three months of 2015. Economists had expected real GDP would be flat in the fourth quarter.

In New York, indexes soared in the wake of a U.S. government report that construction spending reached its highest level in eight years in January, which traders saw as a solid vote in the strength of the economy.

The Dow Jones industrial average shot up 348.58 points or nearly three per cent to 16,865.08, the Nasdaq composite index jumped 131.65 points to 4,689.60 and the S&P 500 gained 46.12 points to 1,978.35.

Despite the current positive mood in stocks markets, Adatia cautioned that volatility will still linger for some time.

"People are getting a little optimistic considering we had a very bad start to the year," he said.

"As we start to see this year progress, there is a lot more volatility around the world and that's going to cause more angst. But we'll take these good days."

In other commodities, April natural gas gained three cents to US$1.74 per mmBtu. May copper was also positive, rising a penny to US$2.14 a pound, while April gold gave back $3.60 to US$1,230.80 a troy ounce.



Advertisements

Latest Economic News

  • Big elevator companies blast Ontario bill, safety agency in new report

    Economic CTV News
    TORONTO -- Canada's major elevator companies, which have come under scrutiny for breakdowns and delayed repairs, are warning that proposed Ontario legislation aimed at enhancing reliability of the devices in the country's largest market could have dire consequences if enacted. Source
  • Wooing Amazon with sun, fun ... and giant buttons

    Economic CTV News
    BOSTON -- Mayors from Toledo to Tulsa are so eager to woo Amazon's much-vaunted second headquarters that they're brandishing bourbon, selling the sun, whispering sweet nothings to the company and even pushing its buttons. Literally. Source
  • Last day Sears Canada will honour extended warranties

    Economic Toronto Sun
    TORONTO — Today is the last day Sears Canada Inc. will honour extended warranties as the retailer prepares to start liquidation sales Thursday. Sears Canada said earlier this week that only customers who bought a protection agreement within the past 30 days could get refunds from paying for extended coverage. Source
  • Delta says it did not play a role in Airbus-Bombardier deal

    Economic CBC News
    Delta Air Lines Inc.'s chief executive on Wednesday said the carrier did not play a role in pushing an industry-changing deal between planemakers Airbus and Bombardier Inc., as a regulatory spat between the United States and Canada threatened the future of a Bombardier plane program. Source
  • Delta says it had no role in Airbus-Bombardier deal

    Economic CBC News
    Delta Air Lines Inc.'s chief executive on Wednesday said the carrier did not play a role in pushing an industry-changing deal between planemakers Airbus and Bombardier Inc., as a regulatory spat between the United States and Canada threatened the future of a Bombardier plane program. Source
  • CMHC says it can withstand a severe shock as it passes stress test scenarios

    Economic CTV News
    OTTAWA -- Canada Mortgage and Housing Corp. says stress testing has confirmed its mortgage loan insurance and securitization businesses are able to withstand a severe shock. The housing agency tested the strength of its businesses against several extreme scenarios. Source
  • Liberals continue tax change tour, narrow scope of passive-income measure

    Economic CBC News
    Finance Minister Bill Morneau is continuing to pull and pluck away at his government's controversial tax regime proposals, promising now to adjust the rules on passive income so only three per cent of the "most wealthy" privately owned corporations will have to pay higher taxes. Source
  • EU air safety body urges halt on use of Kobe Steel products

    Economic CBC News
    The European Aviation Safety Agency has recommended that companies suspend use of Kobe Steel products when possible. The recommendation on the agency's website follows the company's admission that it has faked inspections data on products sold to hundreds of companies. Source
  • Amazon would save $1.5B a year in salaries if new HQ in Toronto area: Ed Clark

    Economic CBC News
    The man heading up Ontario's bid to lure Amazon to the province says the tech giant would save $1.5 billion a year in lower salaries for tech workers by locating in the Greater Toronto area. Ed Clark, Premier Kathleen Wynne's business adviser, said the region offers highly-trained talent at a savings when compared to most U.S. Source
  • Amazon would save $1.5B a year in salaries if new HQ in GTA: Ed Clark

    Economic CTV News
    TORONTO -- The man heading up Ontario's bid to lure Amazon to the province says the tech giant would save $1.5 billion a year in lower salaries for tech workers by locating in the Greater Toronto area. Source