TSX climbs ‘wall of fear’ to achieve 6.2% in November

By Fergal Smith

(Reuters) -Canada’s essential inventory index prolonged its November good points on Friday, transferring to a brand new document excessive, with expertise and industrial shares rising as traders welcomed higher readability concerning the financial outlook following the end result of the U.S. election.

The S&P/TSX composite index ended up 104.48 factors, or 0.4%, at 25,648.00, eclipsing the document closing excessive it posted on Thursday. For the month, it was up 6.2%, its fifth straight month-to-month achieve and the most important since November final 12 months.

“We have climbed that wall of fear,” stated Greg Taylor, portfolio supervisor at Function Investments.

“There was a number of nervousness heading into the (U.S.) election and now we have a minimum of extra readability with what is going on on. We have extra confidence that there is going to be some extra progress facets within the U.S. and that ought to assist earnings because the financial system retains going and regulation falls again.”

U.S. President-elect Donald Trump has pledged to chop taxes and loosen enterprise rules.

Whereas these measures might enhance the financial system, the potential for larger fiscal deficits beneath the Trump administration, in addition to inflationary tariff and immigration insurance policies, might scale back prospects for Federal Reserve rate of interest cuts and lift long-term borrowing prices, say analysts.

“The massive factor everybody goes to be watching is simply what occurs with (bond) yields and the (U.S.) greenback going ahead, as a result of if yields and the greenback maintain going larger that is going to be a fairly large headwind,” Taylor stated.

The Canadian greenback posted its third straight month-to-month decline towards its U.S. counterpart in November as Canada’s financial system grew simply 1% within the third quarter, prompting traders to lift bets on one other outsized rate of interest lower from the Financial institution of Canada.

The expertise sector added 1% on Friday and industrials have been up 0.5%. Seven of 10 main sectors ended larger.