North American stock markets lifted by improved Trump health and stimulus hope

Improvement in the health of U.S. President Donald Trump and the growing hope of a fiscal stimulus deal gave North American stock markets a lift to start the week.

“Given that his health situation represented an additional uncertainty on top of a heap of election uncertainties at the moment, some news that his health situation is improving is, I think, providing the market a little bit of optimism,” said Craig Fehr, investment strategist, Edward Jones.

Trump tweeted he would be leaving the hospital Monday and head back to the White House to further recover from COVID-19.

In addition, Fehr said there’s optimism that another round of U.S. fiscal relief may be inching closer.

“I suspect policy-makers recognize that consumers and households need a deal,” he said in an interview.

“Regardless of which side has leverage heading into the election, the reality is that while both the Canadian and U.S. economies are continuing to improve, the pace is slowing dramatically,” Fehr said.

“And so as that pace of recovery slows to a crawl, it does place additional importance on consumers and households getting the financial relief that they need until the economy is back functioning at some sort of level of normalcy.”

The S&P/TSX composite index closed up 210.94 points or 1.3 per cent to 16,410.19.

In New York, the Dow Jones industrial average was up 465.83 points or 1.7 per cent at 28,148.64. The S&P 500 index was up 60.18 points at 3,408.62, while the Nasdaq composite was up 257.47 points or 2.3 per cent at 11,332.49.

There was a broad-based rally on the TSX with all 11 major sectors rising, led by health care and energy, along with materials, technology and financials.

“While one day a trend does not make, I think it is a signal that today’s optimism is really around the fact that any sort of fiscal relief and any reduction in election uncertainty is broadly positive for the economy and the capital markets at large,” added Fehr.

Health care climbed 4.4 per cent with cannabis producer Aphria Inc. surging 13.8 per cent.

Energy increased 2.7 per cent as crude oil prices soared by nearly six per cent on optimism that’s lifting the outlook for growth. That helped shares of Seven Generations Energy Ltd. to rise 10 per cent and Vermilion Energy Inc. to gain 5.7 per cent.

The November crude contract was up US$2.17 at US$39.22 per barrel and the November natural gas contract was up 17.7 cents at US$2.61 per mmBTU.

In addition, crude prices were helped by an oil workers strike in Norway that reduced production from the closure of offshore oil and gas fields.

The Canadian dollar traded for 75.36 cents US compared with 75.13 cents US on Friday.

Higher gold prices moved the materials sector up 1.7 per cent with shares of New Gold Inc. gaining 11.7 per cent.

The December gold contract was up US$12.50 at US$1,920.10 an ounce and the December copper contract was down 1.45 cents at US$2.96 a pound.

Technology got a lift as Shopify Inc. added three per cent while the heavyweight financials sector increased more than one per cent with Equitable Group Inc. up 3.8 per cent and Toronto-Dominion Bank up 1.6 per cent in heavy trading.

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