(Toronto) The main Canadian stock index recorded slight gains on Monday, while American stock markets also advanced towards the end of the session.
Stocks on Wall Street were lower earlier in the afternoon in part because of comments from U.S. Federal Reserve Chairman Jerome Powell, said Anish Chopra, managing director at Portfolio Management.
Mr. Powell said Monday that more interest rate cuts were coming, but that there would be no precipitous moves.
“We look at this as a process that will take place over a period of time,” he said at a conference in Nashville, Tennessee. How quickly we actually do this will depend on the data. »
PHOTO TOM BRENNER, REUTERS ARCHIVES
US Federal Reserve Chairman Jerome Powell said on Monday that more interest rate cuts were coming, but that there would be no precipitous moves.
The Fed is in no rush to cut its key interest rate, Mr. Chopra said, as it weighs upside risks to inflation and downside risks to the jobs market.
“Inflation could rise, it could fall, but [les responsables de la Fed] “I think if the data stays consistent with what they’ve seen, there will be two more rate cuts coming, but they will be smaller,” Chopra said.
Although the central bank has already signaled that it plans to make two more quarter-percentage-point cuts this year, market watchers were hoping for another sharper half-point cut before the end of the year. year, he stressed.
“So I think Mr. Powell’s comments this afternoon (Monday) disappointed markets and investors in the sense that if they were expecting deeper rate cuts, and that’s not what that they heard,” he added.
In New York, the Dow Jones industrial average rose 17.15 points to 42,330.15. The S&P 500 index jumped 24.31 points to 5,762.48, while the NASDAQ Composite Index gained 69.58 points to 18,189.17.
In Toronto, the S&P/TSX composite index closed up 41.31 points at 23,998.13.
At the end of this week, investors will receive the latest report on the U.S. labor market, perhaps the most closely watched economic news right now after two weaker-than-expected reports raised concerns that rates high have too harsh an impact on employment.
If the data is weaker than expected this time, it could change the Fed’s thinking about its interest rate path, Mr. Chopra said.
However, the Fed’s next interest rate decision will be in November, he noted. So there is yet another jobs report after this week’s release that the central bank will have to look into.
Overseas, Asian markets got off to a frenetic start to the week, with Japanese markets falling 4.8% while stocks in China had their best day in almost 16 years.
Japanese markets have fallen because investors wonder whether the new government will support higher interest rates, Mr. Chopra said.
At the same time, Chinese markets rebounded on the announcement of new measures to revive the country’s economy, he stressed.
On the currency market, the Canadian dollar traded at 73.93 US cents on Monday compared to 74.08 US cents on Friday.
Chevron (+1.22%) rode on the decision of the American Competition Authority (FTC) to validate the takeover of rival Hess, on the condition that the latter’s boss, John Hess, does not join the Chevron’s board of directors.
On the New York Mercantile Exchange, the price of crude oil fell one cent to US$68.17 per barrel and that of natural gas gained two cents to US$2.92 per million BTU.
The gold contract fell US$8.70 to US$2,659.40 per ounce and the copper contract lost five cents to US$4.55 per pound.