Canada’s main stock index rebounded today along with markets around the world.
Energy stocks gained 1.9 per cent on stronger oil prices amidst easing concerns about the omicron coronavirus variant, despite its presence in multiple provinces.
Financials also rose 1.3 per cent due to enthusiasm over healthy balance sheets and upcoming dividend hikes, even though major players like Royal Bank and National Bank missed profit estimates.
Gains in oil prices suggest investors believe OPEC will pause supply hikes after meetings scheduled for today and tomorrow. A planned increase for January 2022 may be postponed depending on omicron-related disruptions and fallout from producer reactions.
While sentiment on the new variant is wide-ranging, experts have highlighted that Canada is optimally protected thanks to a delayed-second-dose policy, which boosted immunity nationwide. Additionally, prompt reporting from South Africa, coupled with our enhanced safety measures, are likely to minimize infections as doctors race to study the variant’s over 30 mutations.
From a macro perspective, Canada’s economy grew 5.4 per cent annualized in Q3, prompted by an 18-per-cent rise in consumer spending, the second-highest increase since the 1960s. While these output levels remain below Q4 2019 numbers, early assessments for October show continued growth, according to Statistics Canada. This should minimize worry over global equity volatility over the past week and lend credence to an interest rate hike prior to the Bank of Canada’s suggested date of April 2022.
The TSX is up 0.3 per cent to 20,721.91 as of 1:48 pm EST a day after posting its biggest decline since October last year.
The average yield on short-term government bonds continues to hover around 1 per cent, signaling a reining in of risk against elevated uncertainty stemming from the B.C. floods, supply chain delays and worker-retention problems centred on the service sector.
That said, with Canadian inflation at 4.7 per cent in October, low yields are still forcing income-hungry investors into alternatives, such as cryptocurrencies, with Bitcoin up close to 100 per cent over the last year.
Market movers
Companies making their presence felt on The Market Herald Canada this week support tech’s continued dominance across equity markets as well as financials’ rebound post-pandemic:
Datametrex AI reported record results for the three and nine-month periods ending September 30, 2021.
SAAS provider Railtown AI Technologies commenced trading on the CSE on Monday.
Finally, Hank Payments, a financial technology company, delivered strong first-quarter results highlighted by 25.3-per-cent YOY revenue growth.
It’s been a busy start to the week for exploration companies announcing capital raises. Among them are:
Euro Sun Mining, focused on gold and copper exploration in Romania.
VR Resources, working on greenfield opportunities in copper and gold in Canada and the U.S.
And Quadro Resources, which is exploring for gold in North America.
