Canada’s benchmark stock index rose 3.74 per cent this week as the flurry of earnings releases and scaled-back bets on rate hikes in the U.S. helped bolster sentiment. 

The S&P/TSX Composite Index on Friday rose by triple digits for the third straight session, closing 236.21 points higher, or 1.21 per cent, at 19,692.92. Energy and financial stocks led the gains.

Markets in New York made a partial comeback in July, with their biggest monthly gain since Nov. 2020. For the Friday session, the S&P 500 jumped 1.42 per cent, the Dow rose 0.97 per cent and the Nasdaq climbed 1.88 per cent.

“What we're seeing right now, I believe, is the realization that a deep recession is coming off the table — that the [U.S. Federal Reserve] has no intentions of driving things that hard into the ground, and nor should they have, because they do have a dual mandate. And we're seeing a relief rally as a result of that,” Patrick Horan, principal at Agilith Capital, said in an interview Friday.

“Our expectation is that this rally has legs and it will last — it's a durable rally. It may not be durable for all of the stocks out there, but certainly durable for the cyclicals.”

Horan also said he sees more opportunity in Canadian stocks than U.S. equities.

“We think in Canada, the manufacturing and commodity cycle here will ultimately be rewarded in the reflationary cycle. We like cyclicals and we like industrials, especially industrials that are tied to the commodity side,” he said.

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Among the barrage of earnings Friday, Imperial Oil Ltd. beat analyst revenue estimates and reported cash flow tripled to almost $2.7 billion in its latest quarter.  

"It's not surprising that Imperial Oil beat exceptions given the energy prices we've seen this year. A lot of the energy companies have beaten and reported very strong cash flows [this quarter]," Christine Poole, the chief executive officer and managing director of GlobeInvest Capital Management, said in an interview Friday.

We aren't surprised energy companies topped estimates, considering the price of oil: Christine Poole

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MEG Energy also benefited from elevated oil prices and reported a $225-million profit in its latest quarter.

U.S. benchmark crude settled 2.2 per cent higher at US$98.62 per barrel Friday. However, West Texas Intermediate prices posted a decline for the month of July overall — the second monthly decline in a row.  

Aecon Group Inc. was the lead laggard on the index, as its shares closed 13.48 per cent lower to $11.10 after the construction company missed adjusted profit expectations in its second quarter even as revenue surged 16 per cent year-over-year to $1.1 billion.

The Canadian dollar rose just under one-tenth of a cent to 78.09 cents U.S.