Canada Stocks: Toronto market rises as investors pin hopes on 'Goldilocks' economy

iA

18/08/2022 21:44

* TSX ends up 83.93 points, or 0.4%, at 20,265.37
    * Energy sector gains nearly 2.7%; oil settles up 2.7%
    * Materials group adds nearly 1%

 (Adds investor quotes and details throughout; updates prices)
    By Fergal Smith
    Aug 18 (Reuters) - Canada's main stock index rose on
Thursday to just short of a two-month high as higher oil prices
bolstered resource shares and investors welcomed recent data
that could signal a soft landing is possible for the U.S. and
Canadian economies.
    The Toronto Stock Exchange's S&P/TSX composite index
 .GSPTSE  ended up 83.93 points, or 0.4%, at 20,265.37. On
Tuesday, it notched its highest closing level since June 10 at
20,269.97.
    "I think the market is in a nice spot right now," said Allan
Small, senior investment advisor of the Allan Small Financial
Group with iA Private Wealth.
    "The Fed (U.S. Federal Reserve) and the Bank of Canada would
love to see a Goldilox scenario - the economy not too hot, not
too slow."
    Investors have worried that in the fight against inflation,
central banks would have to raise interest rates to a level that
would trigger a recession. But recent data has showed both an
easing of U.S. inflation pressures and encouraging job gains.
    The number of Americans filing new claims for unemployment
benefits fell last week and the prior period's data was revised
sharply lower, suggesting labor market conditions remain tight
despite a slowdown in momentum due to higher interest rates.
 urn:newsml:reuters.com:*:nL1N2ZU0VJ
    The Toronto market's energy sector gained nearly 2.7% as
positive U.S. economic data and robust U.S. fuel consumption
boosted oil prices. U.S. crude oil futures  CLc1  settled 2.7%
higher at $90.50 a barrel.
    The materials sector  .GSPTTMT , which includes precious and
base metals miners and fertilizer companies, added nearly 1%,
while heavily-weighted financials ended up 0.2%.
    Canadian banks are expected to post declines in profits on
average in the third quarter as a murky economic outlook drives
up provisions for credit losses while market turmoil pressures
capital markets and wealth management results, analysts and
investors said.  urn:newsml:reuters.com:*:nL4N2ZU2PY

 (Reporting by Fergal Smith; Additional reporting by Sruthi
Shankar in Bengaluru; Editing by Krishna Chandra Eluri and
Alistair Bell)
 ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223
8780; outside U.S. +91 80 6182 2787;))