TORONTO — Magna International and pot stocks helped Canada's main stock index to bounce back from two days of losses, while the loonie reached it highest level in four weeks.
The S&P/TSX composite index closed up 110.20 points to 18,384.27. That's slightly lower on the week but up six per cent so far in February.
In New York, the Dow Jones industrial average was up almost one point to 31,494.32. The S&P500 index was down 7.26 points at 3,906.71, while the Nasdaq composite was up 9.1 points at 13,874.46.
"Canada seems to be the outperformer but when you look beneath the hood, it's being primarily driven by consumer discretionary and health care," said Macan Nia, senior investment strategist at Manulife Investment Management.
The consumer discretionary sector, which led the TSX, climbed 3.1 per cent as Magna shares surged 9.8 per cent.
The auto parts company got a lift after it raised its dividend and executives said Friday that it can grow despite a computer chip shortage plaguing the auto industry.
Health care was almost as hot as Canopy Growth Corp. shares increased 5.4 per cent, Aphria Inc. 5.3 per cent and Cronos Group Inc. 4.2 per cent.
Markets ended a slow week as investors took a little breather from gains earlier in the month and reshifted their focus from the Reddit fiasco to the reflation trade, Nia said in an interview.
"And I think that's going to be very much the story over the next couple of weeks or months because that will have implications not only in the bond markets but in equities."
The Canadian dollar traded for 79.28 cents US compared with 78.76 cents US on Thursday. It reached a high of 79.41 earlier in the day, its highest level in a month.
The loonie could surpass 80 cents US by summer as crude oil prices are expected to rally to US$65 to US$70 per barrel, Nia said.
"A lot of the gains have already been built-in but again the path of least resistance in our view anyways is higher for the Canadian dollar versus the U.S. dollar."
Nia also believes crude will continue to improve throughout 2021.
But on Friday, crude prices were lower as oil production started to resume from freezing weather in the U.S. south. Nia also said they fell on chatter of improved relations between the U.S. and Iran that could result to the Middle East producer boosting output, while there's also talk of Saudi Arabia increasing production.
The April crude oil contract was down US$1.27 at US$59.26 per barrel and the April natural gas contract was up 2.1 cents at US$2.99 per mmBTU.
Materials moved higher as copper prices hit their highest level in more than nine years on increasing demand from China.
The April gold contract was up US$2.40 at US$1,777.40 an ounce and the March copper contract was up 17.3 cents at US$4.07 a pound.
Shares of First Quantum Minerals Ltd. soared 11 per cent, while Ero Copper Corp. were up 10.2 per cent and Hudbay Minerals Inc. gained 8.6 per cent.
The heavyweight financials sector continued to rise as a steepening bond yield curve helps banks and insurance companies.
Investors took the weaker Canadian retail numbers in stride despite sales falling 3.4 per cent to $53.4 billion in December. That was the biggest monthly decline since April, as provinces tightened restrictions in response to a rise in COVID-19 cases, taking a bite out of the normally busy holiday shopping season.
Nia said the backward-looking data isn't a true indication of the health of the economy.
"I think the markets are taking (that) with a grain of salt because that's unlikely to be the environment over the coming months."
First This report by The Canadian Press was first published Feb. 19, 2021.
Companies in this story: (TSX:FM, TSX:ERO, TSX:HBM, TSX:WEED, TSX:APHA, TSX:CRON, TSX:MG, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press