What you need to know before the opening bell: Nov. 29, 2019
TORONTO - Canada's main stock index inched up to a new high Thursday on a quiet day of trading with U.S. markets closed for the Thanksgiving holiday.
The S&P/TSX composite index closed up 13.95 points at 17,114.52, another record close after reaching an all-time high of 17,120.90 earlier in the trading session.
As is often the case when U.S. markets are closed and unable to provide leadership, world markets were listless, said Colin Cieszynski, chief market strategist at SIA Wealth Management.
“The ups and downs of US-China trade relations continue to cast a cloud over stocks with investors concerned today about what impact (if any) U.S. support for pro-democracy protesters in Hong Kong could have on trade talks,” he wrote in a note to clients.
U.S. President Donald Trump signed into law two bills backing protesters in Hong Kong on Wednesday, prompting a warning from China that the move would undermine co-operation with Washington.
The U.S. laws, which passed both chambers of Congress almost unanimously, mandate sanctions on Chinese and Hong Kong officials who carry out human rights abuses in Hong Kong, require an annual review of Hong Kong's favourable trade status and prohibit the export to Hong Kong police of certain non-lethal munitions.
The former British colony, granted semi-autonomy when China took control in 1997, has been rocked by demonstrations for six months, some of which have turned violent.
Some investors are concerned the dispute could thwart efforts to conclude the first phase of an agreement to end a protracted trade war between the world's two largest economies.
Cieszynski said the negative reaction was mostly in Asia and Europe. That could change if China suddenly said it was furious and walking away from trade negotiations.
“Otherwise a lot of it is posturing,” he said in an interview.
The Canadian dollar traded for 75.27 cents US compared with an average of 75.31 cents US on Wednesday.
Health care led the TSX, rising 1.7 per cent on gains from several cannabis producers including Aurora Cannabis Inc., Canopy Growth Corp. and Hexo Corp.
Materials was also higher as the February gold contract was up 90 cents at US$1,461.70 an ounce while the March copper contract was down 2.3 cents at US$2.67 a pound.
Energy rose marginally even though the January crude contract was down 21 cents at US$57.90 per barrel and the January natural gas contract was down two cents at US$2.48 per mmBTU.
Friday's half-day trading session in the U.S. is also expected to be quiet, said Cieszynski.
Trading Friday will conclude a positive month in which North American stock exchanges have set new record highs.
The TSX is up 3.8 per cent in November while U.S. markets have climbed by 3.8 to five per cent, as of Wednesday's close.
Cieszynski partially attributed the bullishness to investors responding positively to the Federal Reserve's decision to stop cutting interest rates because the economy doesn't need the extra stimulus.
Although markets ended last year down, December is historically a good month. It could get off to a good start depending on next week's economic numbers.
“If they're still decent I think we could see the markets just continue to move forward as they have been,” he said.
“I think overall sentiment's a lot better this year than it was this time a year ago and so the fourth quarter this year has had a very different tone than last year and this year has been more in line with what we would call historical seasonality.”