North American stock markets rallied Monday from last week’s selloff with the technology and consumer discretionary sectors rising on signs of a good start to the holiday shopping season.
The bounce is in part due to some exhaustion from last week’s selling, says Craig Fehr, Canadian markets strategist for Edward Jones.
“A good start to the week after a pretty lousy week last week,” he said in an interview.
The S&P/TSX composite index closed up 1.92 points at 15,012.65 after hitting a high of 15,127.13.
Information technology led the index, rising 2.5% on increases by Shopify Inc. and Blackberry Ltd. It was followed by consumer discretionary, which was helped by Hudson’s Bay Co. and Lululemon Athletica. The cannabis-heavy health-care sector fell more than 3%.
Fehr said investors took advantage of deals following last week’s pullback.
In New York, the Dow Jones industrial average rose 354.29 points to 24,640.24. The S&P 500 index was up 40.89 points at 2,673.45, while the Nasdaq composite gained 142.87 points to 7,081.85
A report on preliminary Black Friday shopping numbers pointed to a stronger holiday shopping season with post-U.S. Thanksgiving sales increasing nearly 25% while Cyber Monday was up in the mid-teens.
“It’s a reminder that the consumer is still alive,” he said.
U.S. consumers are armed with confidence and more money amid low unemployment, wage growth, tax cuts and lower gasoline prices. In Canada, the labour market is good but consumers face a heavier debt burden and the housing market is a bit of a headwind, Fehr said.
The trends offset the nervousness investors might be feeling from the market’s recent volatility.
“I think that suggests it’s going to be a good holiday shopping season, which fits into our view that the economic expansion is going to continue.”
The Canadian dollar traded at an average of US75.59¢ compared with an average of US75.60¢ on Friday.
The January crude contract was up US$1.21 at US$51.53 per barrel and the January natural gas contract was down US56¢ at US$4.30 per mmBTU.
The December gold contract was down US80¢ at US$1,222.40 an ounce and the December copper contract was down US1.1¢ at US$2.75 a pound.