Falling Canadian dollar coins or loonies are pictured in North Vancouver, B.C., Wednesday, May 29, 2019. THE CANADIAN PRESS/Jonathan Hayward

North American stock markets rebound as investors undaunted by higher U.S. inflation

North American stock markets rebound as investors undaunted by higher U.S. inflation

TORONTO — North American stock markets rebounded as investors seemed to shrug off news that U.S. inflation is accelerating at its fastest pace since the financial crisis in 2008.

“I think what we’re seeing here, especially in the bond market, is a lot of these inflationist type trades just getting taken to the tool shed,” said Erik Bregar, head of currency strategy at the Exchange Bank of Canada.

He said there’s too many people betting that “scary inflation” will force central banks to react by cutting their accommodative stimulus. The U.S. Federal Reserve hasn’t budged, calling the rise in inflation temporary.

“I think it’s partly the financial media’s fault because there’s just constant focus on inflation, inflation, inflation,” Bregar said in an interview.

“If you’ve got too many people talking about one thing, the market’s just going to do the other.”

Still, American consumers absorbed another surge in prices in May — a 0.6 per cent increase over April and five per cent over the past year, the biggest 12-month inflation spike since 2008.

In its report Thursday, the government said that core inflation, which excludes volatile energy and food costs, rose 0.7 per cent in May after an even bigger 0.9 per cent increase in April, and has risen 3.8 per cent over the past year. That is the sharpest 12-month jump in core inflation since 1992. And it is far above the Federal Reserve’s two per cent target for annual price increases.

Used vehicles surged by a record 10 per cent in April, shot up an additional 7.3 per cent and accounted for one-third of May’s overall price jump.

Bregar said as long as global yields stagnate or drift lower, it will support equities. The U.S. 10-year bond yield dropped to 1.437 per cent Thursday, its lowest level since early March.

Weekly U.S. jobless benefits also fell, reaching a pandemic low 376,000, but that was slightly above economist forecasts.

The S&P/TSX composite index closed up 47.20 points to 20,049.47 after hitting an intraday high of 20,081.06.

In New York, the Dow Jones industrial average was up 19.10 points at 34,466.24. The S&P 500 index was up 19.63 points at 4,239.18 after reaching a record high, while the Nasdaq composite was up 108.58 points at 14,020.33.

Seven of the 11 major sectors on the TSX moved up, led by materials on higher gold prices as the precious metal tends to act in the reverse of bond yields.

The August gold contract was up 90 cents at US$1,896.40 an ounce and the July copper contract was down 4.6 cents at US$4.49 a pound.

Shares of New Gold Inc. increased 5.6 per cent.

The TSX also got a lift from the energy sector, which was helped by higher crude oil prices.

The July crude oil contract was up 33 cents at US$70.29 per barrel and the July natural gas contract was up two cents at US$3.15 per mmBTU.

Parex Resources Inc. rose 3.7 per cent, with Cenovus Energy Inc. up 1.3 per cent.

Crude prices gyrated a bit on Thursday following a report that the U.S. was about to lift sanctions on some Iranian oil officials. That was viewed as a possible precursor to a new nuclear deal that would result in Iranian oil hitting the global supply and lowering prices. Oil prices recovered on the day after the report was denied by an American official.

The Canadian dollar traded for 82.69 cents US compared with 82.68 cents US on Wednesday.

Technology was up on a 23.9 per cent gain by Hut 8 Mining Corp., a cryptocurrency company with bitcoin mining operations.

Health care was the biggest laggard, losing 2.4 per cent as Tilray Inc. lost 6.8 per cent.

This report by The Canadian Press was first published June 10, 2021.

— With files from The Associated Press.

Companies in this story: (TSX:HUT, TSX:TLRY, TSX:PXT, TSX:CVE, TSX:NGD, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

Business

Just Posted

Shanna Lydiard complains that her mail hasn’t been delivered for over 10 weeks due to water main construction on her West Park block. (Photo by LANA MICHELIN/Advocate staff).
Residents of Red Deer street have no mail delivery for 10-plus weeks

Shanna Lydiard says she doesn’t trust the city’s promises

FILE - Alberta Premier Jason Kenney announced that Albertans could start booking second dose shots of the COVID-19 vaccine starting Tuesday night. (photography by Chris Schwarz/Government of Alberta)
Public measures will be lifted: Alberta will enter Stage 3 on Canada Day

Alberta will enter Stage 3 of its Open for Summer Plan on… Continue reading

A massive round dance, involving hundreds of people at Bower Ponds, was a highlight of Canada Day celebrations in 2000. (Contributed photo).
Fireworks without a Canada Day celebration is planned for July 1 in Red Deer

Many residents aren’t in a festive mood, with recent Indigenous graves discovery

Students’ Association of Red Deer College president Brittany Lausen says the government needs to be transparent about why RDC doesn’t have degrees yet. (Red Deer Advocate file photo)
Brittany Lausen earns RDC Outstanding Student Award

Student’s Association of Red Deer College president Brittany Lausen has been named… Continue reading

Gabe Cuthand, Brandon McDonald, Dean Johnson and Dakota Dion drumming during a past Indigenous Peoples Day celebration at City Hall Park in Red Deer (Advocate file photo).
Indigenous Peoples Day will be celebrated online on Monday in Red Deer

National Indigenous Peoples Day will be celebrated in Red Deer on Monday… Continue reading

A supporter of presidential candidate Ebrahim Raisi holds a sign during a rally in Tehran, Iran, Wednesday, June 16, 2021. Iran's clerical vetting committee has allowed just seven candidates for the Friday, June 18, ballot, nixing prominent reformists and key allies of President Hassan Rouhani. The presumed front-runner has become Ebrahim Raisi, the country's hard-line judiciary chief who is closely aligned with Supreme Leader Ayatollah Ali Khamenei. (AP Photo/Ebrahim Noroozi)
Iran votes in presidential poll tipped in hard-liner’s favor

DUBAI, United Arab Emirates (AP) — Iranians voted Friday in a presidential… Continue reading

Tokyo 2020 CEO Toshiro Muto, left, and President Seiko Hashimoto attend the news conference after receiving a report from a group of infectious disease experts on Friday, June 18, 2021, in Tokyo. The experts including Shigeru Omi, head of a government coronavirus advisory panel, issued a report listing the risks of allowing the spectators and the measurements to prevent the event from triggering a coronavirus spread. (Yuichi Yamazaki/Pool Photo via AP)
Top medical adviser says ‘no fans’ safest for Tokyo Olympics

TOKYO (AP) — The safest way to hold the Tokyo Olympics is… Continue reading

FILE - In this June 12, 2021, file photo, Rajkumar Haryani, 38, who painted his body to create awareness about vaccination against the coronavirus poses for photographs after getting a dose of Covishield vaccine in Ahmedabad, India. Starting June 21, 2021, every Indian adult can get a COVID-19 vaccine dose for free that was purchased by the federal government. The policy reversal announced last week ends a complex system of buying vaccines that worsened inequities in accessing vaccines. India is a key global supplier of vaccines and its missteps have left millions of people waiting unprotected. The policy change is likely to address inequality but questions remain and shortages will continue. (AP Photo/Ajit Solanki, File)
How India is changing vaccine plan amid shortages

NEW DELHI (AP) — Starting Monday, every adult in India will be… Continue reading

Chief of Defence staff General Jonathan Vance speaks during a news conference to , in Ottawa Tuesday August 30, 2016. The Canadian Armed Forces says it is making progress in the fight against sexual misconduct in the ranks, but much more work needs to be done. THE CANADIAN PRESS/Fred Chartrand
Freeze promotions until military commanders are screened for misconduct: Committee

OTTAWA — A parliamentary committee has called for a freeze on all… Continue reading

Minister of Families, Children and Social Development Ahmed Hussen takes part in an update on the COVID-19 pandemic, in Ottawa on Tuesday, Oct. 27, 2020. Hussen says he is looking to municipalities to reshape local rules to more quickly build units through the government's national housing strategy. THE CANADIAN PRESS/Sean Kilpatrick
Cities should redo planning, permitting to align with housing strategy, minister says

OTTAWA — The federal minister in charge of affordable housing says he… Continue reading

A dose of the Pfizer-BioNTech COVID-19 vaccine is pictured at a vaccination site in Vancouver Thursday, March 11, 2021. On June 1, NACI had said AstraZeneca recipients "could" get Pfizer-BioNTech or Moderna for their second shot if they wanted, but Thursday went further to say an mRNA vaccine was the "preferred" choice. THE CANADIAN PRESS/Jonathan Hayward
NACI advice to mix vaccines gets varied reaction from AstraZeneca double-dosers

When Gwenny Farrell booked her second dose of the Oxford-AstraZeneca COVID-19 vaccine… Continue reading

Brooklyn Nets' James Harden, right, is guarded by Milwaukee Bucks forward Giannis Antetokounmpo, center, during the first half of Game 6 of a second-round NBA basketball playoff series Thursday, June 17, 2021, in Milwaukee. (AP Photo/Jeffrey Phelps)
Bucks bounce back to defeat Nets 104-89 and force Game 7

MILWAUKEE — Khris Middleton scored 38 points, Giannis Antetokounmpo added 30 and… Continue reading

Tampa Bay Lightning center Brayden Point (21) brings the puck up the ice against the New York Islanders during the third period of Game 3 of the NHL hockey Stanley Cup semifinals, Thursday, June 17, 2021, in Uniondale, N.Y. Tampa Bay won 2-1.(AP Photo/Frank Franklin II)
Point scores again, Lightning beat Islanders 2-1 in Game 3

Lightning 2 Islanders 1 (Tampa Bay leads series 2-1) UNIONDALE, N.Y. —… Continue reading

Most Read