S&P/TSX Composite Starts Quarter Slightly Higher, Even As Crude Dips Below $100


Not kidding, but Canada’s main stock index started the quarter slightly higher as the energy sector rose despite crude oil prices falling below US$100 a barrel.

The S&P/TSX Composite Index closed up 62.79 points on April Fools’ Day at 21,952.95 for a 53-point decline for the week.

In New York, the Dow Jones Industrial Average rose 139.92 points to 34,818.27. The S&P 500 index rose 15.45 points to 4,545.86, while the Nasdaq Composite rose 40.98 points to 14,261.50.

Energy gained 1.7 percent with shares in Peyto Exploration and Development Corp. rising 7.1 percent despite crude prices dipping below $100 for the first time in more than two weeks.

The May crude contract was down $1.01 at $99.27 a barrel and the May natural gas contract was up 7.8 cents at $5.72 per mmBTU.

Colin Cieszynski, chief market strategist at SIA Wealth Management, said the sector grew on gains in natural gas prices as investors saw oil starting to settle to its current highs rather than falling again. at $80.

“So to me it’s kind of an indication that investors are starting to think that if oil starts to settle around $100, life is pretty good for an energy company,” he said in an interview.

The Canadian dollar followed the drop in oil prices with the Canadian dollar trading at 79.92 US cents compared to 80.03 US cents on Thursday.

The materials sector, which includes base and precious metal miners, fertilizer companies and forest products producers, led the TSX with a 2.1 percent gain despite lower metal prices.

The June gold contract fell US$30.30 to US$1,923.70 an ounce and the May copper contract fell 6.3 cents to US$4.69 a pound.

The biggest gains on the day came from forestry companies with Canfor Corp. up 5.0 percent, Interfor Corp. up 4.2 percent and West Fraser Timber Co. Ltd. up 4.7 percent.

Shopify Inc. rose 2.4 percent to boost technology even though BlackBerry Ltd. lost 9.9 percent after reporting quarterly results.

The industrials sector was the day’s laggard, shedding 2.9 percent, as trucking company TFI International Inc. dropped 5.7 percent, Canadian Pacific Railway Ltd. dropped 5.2 percent and Canadian National Railway Co. fell 4.6 percent.

“There are two things that could send rail stocks down: some concerns about higher fuel costs or concerns about slowing demand in the downturn in the economy,” Cieszynski said.

US employment numbers for March were a little lighter than expected, but the February numbers were revised higher.

The economy added 431,000 jobs last month, while the jobless rate fell to 3.6 percent, the lowest level since before the pandemic.

Cieszynski suspects investors are at a loss as to what to make of the situation after US markets suffered their worst quarter in two years with a huge sell-off and rebound during the month.

“A lot of people are looking at anything to decide now that we’ve had this bounce, are there reasons to keep the bounce going or are the broader negative trends reasserting themselves,” he said.

“And I think the problem right now is that we’re sitting in this gray area where people are waiting to see what happens next and what happens next is more rate hikes, something happens with Ukraine or earnings season starts and he can guarantee that earnings season will begin.”

This report from The Canadian Press was first published on April 1, 2022

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