North American stock markets extend rally as investors bet on Trump

North American stock markets continued their winning streak Monday, arsenic investors’ increasing assurance that erstwhile U.S. President Donald Trump whitethorn beryllium heading backmost to nan White House translated to caller gains.

The S&P/TSX composite scale was up 78.16 points to a caller closing grounds of 22,751.68.

In New York, nan Dow Jones business mean was up 210.82 points to adjacent astatine a record-setting 40,211.72. The S&P 500 scale roseate 15.87 points astatine 5,631.22 to adjacent conscionable awkward of past week’s all-time high, while nan Nasdaq composite was up 74.12 points astatine 18,472.57, conscionable short of its ain high.

Monday’s beardown capacity extended caller momentum driven by indications that U.S. ostentation whitethorn beryllium yet slowing capable to person nan Federal Reserve to trim liking rates.

But stocks sewage an added boost from investors who consciousness Trump’s chances of re-election are looking progressively likely. Some pollsters person said Trump, who survived an assassination effort complete nan weekend, could get an contiguous bump successful elector support successful nan aftermath of that event.

“People are calling it nan ‘Trump trades,’ ” said Stephen Duench, vice-president and portfolio head of AGF Investments Inc.

“A batch of nan things that we saw past week (in nan markets) conscionable sewage supercharged connected President Trump’s predetermination likelihood going higher.”

The banal marketplace likes nan thought of a Trump 2.0 presidency, Duench said, successful ample portion because a Republican management is seen arsenic perchance having a lighter regulatory touch than a Democratic one.

The sectors astir poised to use from little regulation, specified arsenic financial companies and nan power industry, led nan marketplace Monday.

In Canada, power stocks were nan TSX’s champion performers, pinch nan S&P/TSX capped power scale up 1.79 per cent by day’s end.

“We’re over-concentrated successful financials and power successful Canada,” Duench said.

“So by default, we benefit. Like it aliases not, nan Trump waste and acquisition plays good for Canada arsenic well.”

The different facet helping to assistance markets Monday was caller comments from U.S. Federal Reserve chair Jerome Powell, who said successful a question-and-answer convention successful Washington that nan cardinal slope is becoming much convinced that U.S. ostentation is headed backmost to its 2 per cent target.

While Powell did not supply immoderate hints of erstwhile nan first complaint trim would occur, he said nan Fed will trim rates earlier nan gait of value increases really reaches nan 2 per cent target.

Investors are keen to spot nan U.S. Federal Reserve statesman cutting liking rates, a move that would thief companies of each sizes that person been nether unit from nan accrued costs of borrowing.

But while nan Bank of Canada has already started to trim rates, Fed officials person been saying they want to spot “more bully data” connected ostentation earlier making a move.

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Much of Wall Street is now banking connected nan Federal Reserve to statesman cutting its main liking complaint successful September, Duench said.

He said each eyes will beryllium connected nan cardinal bank’s yearly summertime convention successful Jackson Hole, Wyo. successful August.

“Generally, Jackson Hole is wherever they (the Fed) benignant of springiness america nan marketplace colour successful position of Federal Reserve liking complaint argumentation for nan adjacent 12 months,” Duench said.

Until then, investors will beryllium watching for immoderate economical information that mightiness derail nan increasing statement that ostentation has eased capable to warrant a complaint hike.

The latest information of North American firm earnings, which is conscionable beginning, will besides beryllium important, Duench added.

While markets person been connected a tear and location is still plentifulness of opportunity to spell higher, thing is group successful chromatic yet, he said. Even nan “Trump trades” aren’t guaranteed to continue.

“We’re truthful early successful nan game. It’s still mid-July and nan predetermination isn’t for galore months,” Duench said.

“So again, that could adhd a small spot of risk, aliases astatine slightest volatility to nan market.”

The Canadian dollar traded for 73.19 cents US compared pinch 73.38 cents US connected Friday.

The August crude lipid statement was down 30 cents astatine US$81.91 per tube and nan August earthy state statement was down 17 cents astatine US$2.16 per mmBTU.

The August golden statement was up US$8.20 astatine US$2,428.90 an ounce and nan September copper statement was down 7 cents astatine US$4.53 a pound.

— With files from The Associated Press