Canadian stocks post all-time high intraday and closing highs; BMO Economics on the “return to equities” and growing downside risks

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Canada’s main market, the Toronto Stock Exchange, added nearly 50 points of gains on Friday to the nearly 580 points gained in the previous three sessions, and with it all managed to set new intraday records and closing highs. of 21,877.14 and 21,819.8 respectively.

That leaves the TSX up about 2.8% year-to-date.

BMO Economics’ Douglas Porter in his “Talking Points” note on Friday noted that even amid all the “clear and present” risks to the growth outlook, financial markets “have mostly advanced” this week. Yields jumped again, stocks rebounded and oil rebounded above US$100 after a steep decline earlier in the week. Porter said the “equities comeback” may be the most notable move; after falling 13% in just 10 weeks and jumping to the “so-called death cross,” the S&P 500 quickly recorded a 5% rebound. Given the current global circumstances, it may be almost inappropriate to point out that the TSX has hit all-time highs and is up 5% since the invasion began, Porter added.

But, Porter said, despite the rally in stock markets this week, there is no doubt that downside risks to growth are increasing. He recalled his missive last week which cited five major brakes on growth resulting from the conflict – more inflation, supply chain problems, the blow to confidence from the war, sanctions and financial conditions weaker. And he added that the threat of further disruptions to supply chains has been further amplified by shutdowns in China’s major industrial areas.

Among the sectors today, financials rose 0.15%. But energy fell nearly 0.35% and materials about 0.3%.

Among commodities today, gold closed early on Friday even as investors sought to shed risk ahead of the weekend, moving towards the dollar and driving bond yields lower, as the Russian invasion from Ukraine continues to shake the markets. Gold for April delivery closed $13.90 at US$1,929.30 an ounce.

But West Texas Intermediate crude oil closed higher after a volatile week as Russia’s war on Ukraine continues to disrupt markets, while peace talks have so far proved fruitless. WTI crude for April delivery ended up 1.72 at US$104.70 a barrel, Marketwatch reported. May Brent crude was last seen up $1.11 at US$107.75 while Western Canada Select was up $0.82 at US$91.29 a barrel.

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