S&P 500 Reaches 5,000

It’s a momentous day for US equity markets with the S&P 500 Index reaching the 5,000 mark for the first time today.

The S&P 500 has gained 3.1% over the last week, compared with a 0.25% decline for the S&P/TSX Composite Index. While Technology continues to drive the rally, there has been wider participation among cyclicals with Manufacturing, Transportation, Retailers, and Construction also rallying this week. On the other hand, interest rate sensitive groups including Banks, Utilities, and Real Estate, plus Energy and Materials have struggled in recent days.

US index futures are otherwise flat, digesting yesterday’s big push up that saw major indices gain 0.4% to 0.9%. Over in Europe, the Dax is up 0.4%, the FTSE is flat. Asia Pacific trading was mixed with Tokyo up 2.0%, Shanghai up 1.3% and Hong Kong down 1.3% with the Lunar New Year holiday approaching.

The market reaction to overnight earnings reports has been mixed. Walt Disney is up 8.2% after the entertainment giant beat the street on earnings ($1.22 vs street $0.99) raised its dividend by 50% and announced an investment in Epic Games, producer of Fortnite. On the other hand, Paypal is down 8.9% in premarket trading after disappointing guidance trumped an earnings beat.  

Earnings from Canadian companies have been positive with Sun Life ($1.68 vs street $1.58), Thomson Reuters* ($1.32 vs street $1.23), BCE ($0.76 vs street $0.73), Bombardier ($1.85 vs street $1.81) and Lightspeed Commerce* ($0.11 vs street $0.06) beating expectations. Tomorrow brings results from Enbridge, Telus, and Magna.  

US weekly initial jobless claims (218K vs street 220K) were slightly better than expected. Tomorrow brings this month’s Canadian jobs report (street 15L) and average hourly wages (previous 5.7%).

*Shares of Thomson Reuters and Lightspeed Commerce are held in some portfolios managed by SIA Wealth Management.

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