TORONTO 鈥� North American markets moved up on the first day of August trading in Canada, even as concerns mount around rising COVID-19 case counts in the U.S.
Scott Guitard, senior vice-president and portfolio manager at Fiduciary Trust Canada, said it was a typically slow start to the summer month in terms of volume.
However, he said markets managed to continue upward movement on Tuesday thanks to second quarter earnings that beat expectations last week, and the belief that the U.S. is prepared to weather the Delta variant of the coronavirus.
鈥淚 think (the Delta variant) will continue to be a factor, but I don鈥檛 think it鈥檚 going to stop the economic recovery that we鈥檙e already seeing in the States, it鈥檒l probably just make it take a little longer.鈥� said Guitard in an interview.
"Countries like Canada and the U.S are pretty well prepared for this type of thing.鈥�
The S&P/TSX composite index was up 78.05 points at 20,365.85 after it was closed for a holiday Monday.
In New York, the Dow Jones industrial average was up 278.24 points at 35,116.40. The S&P 500 index was up 35.99 points at 4,423.15, while the Nasdaq composite was down 80.23 points at 14,761.30.
Despite the positive moves for equities, COVID-19 cases are still weighing on oil prices as concerns remain about demand levels for the commodity, Guitard said. The September crude oil contract was down 70 cents at US$70.56 per barrel and the September natural gas contract was up 9.2 cents at US$4.02 per mmBTU.
The TSX鈥檚 energy index ended the day up slightly, gaining 0.8%.
"The backdrop is fairly positive for Canadian names right now with the absolute price of WTI crude," said Guitard.聽
"Canadian companies have shown some pretty solid earnings and we'll likely continue to see positive news there as there鈥檚 lots of free cashflow, so we're seeing opportunity for dividend increase, share buybacks, debt repayments and all that good stuff."
In other commodities, The December gold contract was down US$8.10 at US$1,814.10 an ounce and the September copper contract was down 4.7 cents at US$4.38 a pound.
The Canadian dollar traded for 79.71 cents US compared with 80.24 cents US on Friday.
Looking ahead, Guitard said investors will be awaiting the U.S. jobs report for non-farm payrolls, which is set to come out on Friday.
Statistics Canada will also release its labour report on Friday, and multiple large Canadian companies are set to release their second quarter earnings reports in the coming days.
BCE Inc., and insurance companies like Manulife Financial Corp. and Sun Life Financial Inc. are among some of the companies reporting results Wednesday and Thursday.
Meanwhile in the U.S., Guitard said the mood of the market has definitely shifted in the past couple months.
"Concerns about the Delta variant are at the top of the pile right now, whereas two months ago it was mostly inflation," he said.
"Now things have flipped a bit where investors are thinking inflation is likely more transitory and the focus is back on growth."
This report by The Canadian Press was first published Aug. 3, 2021.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD, TSX:BCE, TSX:MFC, TSX:SLF)
Salmaan Farooqui, The Canadian Press
