Canada’s main stock index rose more than 300 points on Monday in a broad-based rally, while U.S. markets also rose.
This week is going to be much quieter than last week, including an interest rate decision from the US Federal Reserve and a weaker than expected US jobs report.
The S&P/TSX composite index closed 312.06 points higher at 22,259.47.
In New York, the Dow Jones industrial average was up 176.59 points at 38,852.27. The S&P 500 index was up 52.95 points at 5,180.74, while the Nasdaq Composite was up 192.92 points at 16,349.25.
The Fed kept its key rate steady last week but signaled it planned to ease other quantitative tightening measures somewhat.
This was more disappointing than the market expected, said Rose Deoli, portfolio manager at 1832 Asset Management.
US markets rose on Friday after the jobs report was cooler than expected.
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The question for investors now is whether economic data will continue to be slow enough to warrant a rate cut, but not so soon, Deoli said.
“It is a puzzle whether we are in stagflation? “Are we really in a recession, or what are we seeing here?” He said.
“So May should be interesting.”
He said, the markets are in a wait and see situation. Expectations of rate cuts have diminished considerably since the beginning of the year.
Last week, Fed Chairman Jerome Powell emphasized the fact that inflation is proving stubborn, and the central bank needs more confidence that it is on the right track before cutting interest rates.
Meanwhile, in Canada, economic data supports a cut in June, Deoli said.
As US earnings season approaches, the overall reports have been quite good, although signs of an economic slowdown are visible to some extent, Deoli said.
Most companies in the S&P 500 have already reported their first-quarter results, with more than three-quarters topping profit expectations, according to FactSet.
Big names reporting this week include The Walt Disney Co. and Uber Technologies.
The Canadian dollar traded at 73.20 cents US, compared with 73.14 cents US on Friday.
The June crude oil contract was up 37 cents at US$78.48 a barrel and the June natural gas contract was up five cents at US$2.19 per 1,000 cubic feet.
The June gold contract was up US$22.60 at US$2,331.20 an ounce and the July copper contract was up six cents at US$4.62 a pound.
– With files from The Associated Press
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