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Energy sector lifts S&P/TSX composite, US stock market ends day higher

Gains in the energy sector helped Canada’s main stock index end the day in the green, while the US stock market also closed higher, a day after recording a worse session. as of June 2020.

S&P /TSX The composite index rose 80.74 points to close the trading day at 19,726.14.

In New York, the Dow Jones Industrial Average rose 30.12 points to 31,135.09. The S&P 500 index ended the trading day up 13.32 points to 3,946.01, while the Nasdaq composite closed up 86.11 points to 11,719.68.

The energy sector gained more than 3%, with stocks such as Suncor Energy Inc., Canadian Natural Resources Ltd., Cenovus Energy Inc. and Crescent Point Energy Corp. are all positive.

Read more:

North American markets wobble, with US stocks falling for worst since June 2020

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“Energy is like a really good haven,” said Greg Taylor, chief investment officer at Purpose Investments.

“We really like energy stocks. These companies have spent a lot of time cutting costs and operating in a really lean environment, and now that we’ve had the price of energy – both oil and natural gas – go up, they actually generating a lot of cash flow. “

And what these companies are doing with their profits is giving them back to shareholders in the form of dividends and buybacks, Taylor said.

“When you look at some of the shake-ups in other sectors, the energy sector really stands out as a nice bright spot.”

The October crude contract was up $1.17 at $88.48 a barrel on Wednesday and the October natural gas contract was up 83 cents at $9.11/mmBTU.

After a wild Tuesday in the markets, Taylor warned of further volatility ahead of next week’s US Federal Reserve interest rate decision.

“Last week was an anomaly with Labor Day coming up, and I think people were complacent, and then yesterday with the US CPI numbers rising, I thought it was a dose of unexpected reality. to investors that the Fed is not like that. I won’t go far,” he said.

“I think now you’ve got more people in an uncertain footing.”

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While economists are still largely expecting a three-quarter percentage point increase, a larger possibility is a full percentage point.

“If 100 comes in, I think you will see a big change in bond yields and a big change in the US dollar, and both of those things will be a shock to the market,” Taylor said. stock market.

Aside from interest rates coming in next week, Taylor explained that the biggest risk to the market is in the upcoming earnings season that begins in October.

The company’s results and forecasts are likely to take the market down beyond the lows we saw in June.

“Going into the year, the market multiples increased a bit and they went back to more of the average. But what we haven’t really seen is anyone taking a cut in earnings, and if people start to fear that there’s a recession or that companies can’t get through the price hikes and they start dropping estimates, your earnings, that combined with the discounted multiple could lead to a (deeper) drop,” he said.

The crypto market will be in the spotlight tomorrow with the consolidation of Ethereum into an eco-friendly network taking place tonight.

“It could be a big event for crypto because if it goes well, I think it could be a step forward with many cryptocurrencies becoming more eco-friendly and efficient than a single one. little. So attracting more investors into the space could be a good thing,” Taylor said.

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“Contrary to that, if it doesn’t work, then we have more second guesses. And people will have a different view of their crypto assets.”

The Canadian dollar traded for 75.95 US cents versus 76.28 US cents on Tuesday.

The gold contract for December delivery was down $8.30 at $1,709.10 an ounce and the December contract was down about 4 cents at $3.52 a pound.

© 2022 Canadian Press

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