The Canadian dollar coin is pictured in North Vancouver, B.C., Wednesday, May 29, 2019. THE CANADIAN PRESS/Jonathan Hayward

S&P/TSX composite starts quarter slightly higher even as crude dips below US$100

S&P/TSX composite starts quarter slightly higher even as crude dips below US$100

TORONTO — It’s no joke, but Canada’s main stock index started the quarter slightly higher as the energy sector climbed despite crude oil prices dipping below US$100 per barrel.

The S&P/TSX composite index closed up 62.79 points on April Fools’ Day to 21,952.95 for a 53-point decrease on the week.

In New York, the Dow Jones industrial average was up 139.92 points at 34,818.27. The S&P 500 index was up 15.45 points at 4,545.86, while the Nasdaq composite was up 40.98 points at 14,261.50.

Energy gained 1.7 per cent with shares of Peyto Exploration and Development Corp. increasing 7.1 per cent despite crude prices settling below US$100 for the first time in more than two weeks.

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

Colin Cieszynski, chief market strategist at SIA Wealth Management, said the sector rose due to gains in natural gas prices and investors seeing that oil is starting to settle at its current higher levels rather than crashing back down to US$80.

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

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

The materials sector, which includes precious and base metals miners, fertilizer companies and forest products producers, led the TSX by increasing 2.1 per cent despite lower metals prices.

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

The largest increases on the day came from forestry companies with Canfor Corp. up 5.0 per cent, Interfor Corp. 4.2 per cent higher, and West Fraser Timber Co. Ltd. rising 4.7 per cent.

Shopify Inc. increased 2.4 per cent to move technology higher even though BlackBerry Ltd. lost 9.9 per cent after reporting quarterly results.

The industrials sector was the laggard on the day, losing 2.9 per cent as trucking firm TFI International Inc. was down 5.7 per cent, Canadian Pacific Railway Ltd. was off 5.2 per cent and Canadian National Railway Co. was 4.6 per cent lower.

“There’s two things that could knock the railroad stocks down — either some concerns about higher fuel costs or concerns about slowing demand in the slowing economy,” said Cieszynski.

U.S. employment numbers for March were a little lighter than expected but February’s numbers were revised higher.

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

Cieszynski suspects investors don’t know what to make of the situation after U.S. markets suffered their worst quarter in two years with a big sell-off and bounce for the month.

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

“And I think the problem right now is we’re just kind of sitting in this grey zone where people are waiting to see what happens next and what happens next is either more rate hikes, something happens with Ukraine or earning season starts and the one you can guarantee is earning season is going to start.”

This report by The Canadian Press was first published April 1, 2022.


Ross Marowits, The Canadian Press