TORONTO — Rising oil prices helped lift the energy sector in Canada’s main stock index on a day where U.S. markets were mixed as concerns about the government tapering stimulus persist.
Craig Jerusalim, portfolio manager at CIBC Asset Management said those concerns around tapering led to weakness in some of the larger American tech stocks, with Microsoft Corp., Amazon.com Inc. and Apple Inc. dropping around half a per cent, and Twitter Inc. down nearly two per cent.
“The market does at times have a very short attention span,” said Jerusalim.
“One moment it’s worried about the Delta variant, the next it’s worried about higher interest rates, so it’s the latter concern right now that seems to be weighing on tech specifically.”
He noted Ottawa-based Shopify Inc. was also hurt by those worries, with its stock dropping 1.87 per cent to $1,912.44.
The S&P/TSX composite index was up 58.32 points at 20,495.74.
In New York, the Dow Jones industrial average was up 162.82 points at 35,264.67. The S&P 500 index was up 4.40 points at 4,436.75, while the Nasdaq composite was down 72.09 points at 14,788.09.
The Canadian dollar was up slightly, trading for 79.74 cents US compared with 79.59 cents US on Monday.
Many commodities enjoyed another day of rebounds after weak performances in recent days.
The September crude oil contract was up US$1.81 at US$68.29 per barrel and the September natural gas contract was up 2.9 cents at nearly US$4.09 per mmBTU.
Jerusalim said he expected the crude oil price to maintain a floor at the mid-US$60s with ongoing supply limitations, although noted that a recent deal with OPEC plus countries to ratchet up production erased the risk of oil flying up to prices like US$90 a barrel during the economic reopening.
The December gold contract was up US$5.20 at US$1,731.70 an ounce, recovering after a plummet that came following weeks of the precious metal hovering around the US$1800 mark.
Jerusalim speculated that the drop could have something to do with the recent run that cryptocurrencies such as Ethereum and Bitcoin have experienced.
Bitcoin is up around 18 per cent for the week and around 39 per cent for the month, as it recovers from a steep sell off that took place in mid-May.
Meanwhile, the tail end of second quarter earnings continue to impact Canadian equity markets, with the stock for payments company Nuvei Corp. rising 15.03 per cent to $119.07 after a strong earnings report that more than doubled its revenue year-over-year.
Jerusalim said the TSX’s tech sector could be on pace to overtake energy as the exchange’s second biggest sector.
“There are many companies above a billion dollars that have been doing extremely well like Nuvei and Lightspeed… I like the new breadth and depth of the technology sector in Canada,” he said.
“If this trend continues, technology is quickly going to become the second largest sector weight on the TSX.”
This report by The Canadian Press was first published Aug. 10, 2021.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X, TSX:NVEI, TSX:SHOP)
Salmaan Farooqui, The Canadian Press