US stock markets rose after a few minutes since the last Federal Reserve meeting, suggesting that the central bank will not be more aggressive in aggressively raising interest rates. in the coming months.
Greg Taylor, chief investment officer of Purpose Investments, said investors were relieved because Fed members indicated about three weeks ago that they don’t want to be too fake and risk crashing the market and the economy.
“So it seems like a bit of a relief, and that has brought money and short coverage off the line,” he said in an interview.
Taylor said there was concern that the central bank would overcompensate for not raising interest rates sooner.
“The fear would be that they would be super aggressive and go to 75 beeps or more than that and really try to slow down,” he said in reference to efforts to reduce inflation.
But everyone is comfortable with the idea of raising the 50 basis points in each of the next two meetings and then reassessing the situation, he said.
“This is something that is already priced in the market and is probably a good sign.”
The S & P / TSX Composite Index closed at 97.55 points to 20,383.75 points.
In New York, the Dow Jones industrial average rose 191.66 points to 32,120.28. The S&P 500 index rose 37.25 points to 3,978.73, while the Nasdaq index rose 170.29 points or 1.5% to 11,434.74.
U.S. markets appear to have calmed down in recent days due to very sluggish market movements and high volatility after seven consecutive weeks of declines.
Taylor said the hope is that the trend will continue until the end of the week and the start of a long weekend in the US.
“Volumes are pretty light, but it looks like they’re trying to save the month and have a bit of a rebound by the end of the month.”
He said there were “a few green shoots” with some of the best-selling parts of the market starting to perform a little better. The technology, which has been down for most of the year, recovered during the week.
In addition, bond yields, which have been a major indicator of future problems, fell slightly.
In Canada, the technology sector rose 1.1% with Lightspeed Commerce Inc. 4.4%, BlackBerry Ltd. 3.1% of Shopify Inc. 2.5% more.
Healthcare led, up 2.8 percent, as cannabis companies bounced back from Tuesday’s heavy losses with Canopy Growth Corp. 6.3 percent.
Energy was the second best performer on the TSX, rising 2% as crude oil prices rose and natural gas rose to a eight-year high.
The July crude contract rose 56 cents to $ 110.33 a barrel and the July natural gas contract rose 15.7 cents to $ 8.99 per mmBTU.
Vermilion Energy Inc. increased by 8.9% while Enerplus Corp. increased by 6.3%.
“Oil is around $ 110 and I think it’s a big win for all of these companies … so Canadian energy producers are pretty big, and I think it’s more for people to realize that these prices aren’t ‘They’ll be gone soon. “
The Canadian dollar was trading at 77.90 US cents compared to 77.97 US cents on Tuesday.
The heavy financial sector had a good day after Scotiabank and Bank of Montreal started the second quarter with good results and increasing their dividends.
Shares of Scotiabank rose 2.9%, while BMO fell slightly.
Taylor said there was some concern after U.S. banks reported and indicated some problems controlling spending. But those concerns faded with the first two Canadian banks reporting results that said they hoped to keep spending growth at a low digit.
The industrial, materials, utilities and real estate sectors were the ones behind the day. Materials lost about half a percent due to lower metal prices.
The June gold contract fell $ 19.10 to $ 1,846.30 an ounce and the July copper contract fell 5.1 cents to $ 4.25 a pound.
This report from The Canadian Press was first published on May 25, 2022.
Companies in this story: (TSX: VET, TSX: ERF, TSX: BNS, TSX: BMO, TSX: WEED. TSX: LSPD, TSX: BB, TSX: SHOP, TSX: GSPTSE, TSX: CADUSD = X)