North American stock markets continue recovery as oil prices boost energy sector

TORONTO — North American stock markets continued to recover from losses earlier in the week, with strong performances in the energy sector bringing Canada's main stock index above the 20,000 mark again.

"The markets are having a nice rebound," after steep losses on Friday and Saturday that centred around concerns over COVID-19 variants, said Michael Currie, vice-president and investment adviser at TD Wealth.

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"It’s recovered all the way back and the markets are pretty much even or slightly positive for the month of July — it’s been a very sharp recovery."

Currie said the S&P/TSX composite benefitted from a strong day for energy stocks, as oil prices continue to rebound after a steep drop following news over the weekend that OPEC plus had reached a deal to ratchet up production.

The S&P/TSX composite index was up 167.34 points at 20,110.05, while the TSX’s energy index was up 2.59 per cent to 125.8 points.

The September crude oil contract was up US$3.10 at US$70.30 per barrel and the August natural gas contract was up 8.3 cents at US$3.96 per mmBTU.

Oil prices had dropped as low as US$65.76 per barrel this week after an agreement for increased production was reached by a loose coalition of oil-producing countries that includes OPEC’s official members, as well as Russia, Malaysia and Mexico, among others.

"The only real negative sector was telecom, and that is mostly on Rogers Communications Inc. that announced revenues that weren’t bad," said Currie.

Rogers stock dropped by 3.78 per cent today following their earnings report.

Other notable Canadian stocks included Great-West Lifeco Inc. and Canadian National Railway, which both rose by more than 1 per cent.

Currie pointed out Great-West Lifeco in particular benefitted after acquiring Prudential Financial Inc.'s retirement business in a $4.45-billion deal that’ll increase the company’s U.S. presence.

CN reported its earnings on Tuesday after the close of markets.

Meanwhile in the U.S., Currie said companies including Coca-Cola Co. and Moderna Inc. had strong performances that lifted the Nasdaq, with Moderna ending the day up 4.48 per cent to US$321.11 per share.

The August gold contract was down US$8 at US$1,804.40 an ounce and the September copper contract was down less than a penny at US$4.27 a pound.

Currie said gold was down as a result of a strong U.S dollar and a bounce-back in American bond yields, which had been sinking over the past month.

"Bonds had a pretty good rally today," said Currie, with the 10-year benchmark up seven basis points to 1.288 per cent.

The Canadian dollar also had a strong day, trading for 79.43 cents US compared with 78.55 cents US on Tuesday.

The rise was attributed to rising oil prices, although Currie said the loonie was also held back by the fact that the U.S dollar had a strong day as well.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD, TSX: CNR, TSX: GWO, TSX: RCI.B)

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