Equities

Equities Gather Steam Following Omicron Outbreak


Canada’s main stock index rebounded on Thursday from a seven-week low hit in the previous session, supported by defensive sectors and financials as major lenders boosted their dividends.

The S&P/TSX Composite leaped 277.78 points, or 1.2%, by noon EST Thursday to 20,742.38.

The Canadian dollar edged up 0.03 cents at 78.06 cents U.S.

Toronto-Dominion Bank and Canadian Imperial Bank of Commerce joined rivals in announcing higher dividends and share repurchases.

TD shares popped $3.95, or 4.3%, to $95.93, while those for CIBC dropped $2.34, or 1.7%, to $138.92.

Consumer discretionary stocks gained with Restaurant Brands International advancing $2.26, or 3.2%, to $71.92, Magna International better by $3.46, or 3.6% to $99.93, and Canadian Tire Corp up $3.88, or 2.3%, to $174.24.

ON BAYSTREET

The TSX Venture Exchange plummeted 15.14 points, or 1.7%, to 902.78.

All but two of 12 TSX subgroups were in the green, led by consumer discretionary stocks, ahead 2.5%, consumer staples, improving 2.4%, and financials, up 2.1%.

The two laggards were gold, down 1.7%, and materials, sliding 0.4%.

ON WALLSTREET

Stocks rebounded sharply on Thursday from a selloff in the previous session spurred by the arrival of the latest Covid variant on U.S. shores.

The Dow Jones Industrials regained 637.71 points, or 1.9%, to pause for lunch Thursday at 34,659.75, helped by a 5% uptick in Boeing’s stock.

The S&P 500 index climbed 68.98 points, or 1.5%, to 4,582.02.

The NASDAQ recovered 124.75 points to 15,378.80.

Airline, casino and energy stocks led the gainers on Thursday, rebounding from Wednesday’s selloff. Delta Air Lines rose 7%, MGM Resorts added 5.3% and Hilton Worldwide gained 6.3%. Norwegian Cruise Line added 6%.

Dow component Boeing’s shares jumped 5.4% after China cleared the 737 Max to return to fly.

On the negative side, Apple’s stock dropped 2% after Bloomberg News reported the tech giant is experiencing slowing iPhone demand ahead of the all-important holiday season.

Investors continue to watch for developments on the new omicron COVID-19 variant, with uncertainty around its rate of transmissibility and fears that it could evade vaccines.

A second case of omicron was revealed on Thursday. Minnesota public health authorities reported the second U.S. case of the omicron COVID variant in a resident who recently returned from New York City. The Minnesota resident has already recovered from omicron and the California resident reported mild symptoms.

Still, Bank of America noted that December has historically been the strongest month for the S&P 500, with the index gaining 2.3% on average since 1936 and positive 79% of the time. However, December has not always been immune to selloffs, according to some experts.

On the data front, initial jobless claims totaled 222,000 for the week ended Nov. 27. Economists were expecting a print of 240,000, according to estimates from Dow Jones. The prior reading showed 199,000 first-time filers, which was the lowest since November 1969.

The November jobs report will be released on Friday.

Prices for 10-year Treasurys lost a bit of ground, moving up yields to 1.46% from Wednesday’s 1.42%. Treasury prices and yields move in opposite directions.

Oil prices regained $1.10 to $66.67 U.S. a barrel.

Gold prices were off $18.10 to $1,766.20 U.S. an ounce.


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