Stocks are moving higher yet again on Monday, adding to a slow and steady streak of gains as investors focus on company earnings and the higher prospects for more economic stimulus to combat the impact of the coronavirus.
The Toronto Stock Exchange’s benchmark group of stocks, known as the S&P/TSX composite index, was up by almost one per cent to 18,282. U.S. stock indicators including the Dow Jones Industrial Average, the broad market S&P 500 and the tech-focused Nasdaq were up about the same amount in percentage terms, and all four were on track to close at all time highs.
That’s a sign investors are feeling optimistic about the economy, even as vaccinations are progressing at a glacial pace, and there are troubling reports of their effectiveness against new emerging variants.
“Against the backdrop of an encouraging earnings season, better COVID news and a massive stimulus package making its way through Congress, there’s still plenty of optimism out there,” said Craig Erlam, an analyst with foreign exchange firm Oanda.
U.S. President Joe Biden and Congressional Democrats appear to be moving forward with their own version of a coronavirus stimulus bill that is estimated to cost $1.9 trillion US.
Investors believe improving economic fortunes and trillions of dollars in stimulus could make stocks more attractive as lending is cheaper and corporate earnings grow.
Bitcoin spikes, too
Tesla rose 2.5 per cent after the company said it had purchased $1.5 billion in bitcoin and pIans to allow customers to pay for their electric vehicles with the digital currency. Bitcoin was up 14 per cent to $43,715 according to digital currency brokerage Coinbase.
The price of a barrel of oil gained more than $1 to trade at $57.90. Oil is rising on expectations that more of it will be needed to power an expanding economy, and Canada’s stock market is closely tied to the price of oil.
Shares in oil companies and pipelines were broadly higher on the TSX.
“We’re seeing huge improvements in recent weeks and that will make people feel more positive that the light at the end of the tunnel is getting ever closer. It’s been a long winter, after all,” Erlam said.