FX.co ★ Canadian Market Up In Positive Territory After GDP Data

Thursday has seen a rise in the Canadian market, primarily driven by a spike in gold prices which has boosted materials stocks. Whilst energy and consumer discretionary stocks are garnering some strength, other sectors are experiencing varied performances.

The market's optimistic sentiment is largely due to stronger-than-anticipated Canadian and U.S. GDP growth data. In February 2024, the Canadian economy is projected to have grown by 0.4%, with sectors like mining, quarrying, oil and gas extraction, manufacturing, and finance and insurance contributing largely to this growth. Conversely, the utilities sector saw a decrease. For January, the GDP had grown by 0.6%, surpassing the initial prediction of a 0.4% expansion.

Further data from Statistics Canada revealed that the average weekly earnings of non-farm payroll employees in Canada increased by 3.9% year-on-year to $1,228 in January 2024.

The Canadian Federation of Independent Business reported a slip in its business barometer for Canada, a long-term gauge that represents the 12-month business performance expectations for the country, to 52.7 in March from a revised 55.1 in February.

The Commerce Department disclosed that the U.S. economy grew unexpectedly more than previously estimated in the fourth quarter of 2023. Revised data indicated a surge of 3.4% in the real gross domestic product, versus the earlier reported 3.2% increment. This growth outpaced economists' predictions.

The S&P/TSX Composite Index rose by 78.85 points or 0.36% to 22,185.93, merely points away from a 52-week high. Companies like Novagold, Seabridge Gold, First Quantum Minerals, Iamgold, Equinox Gold Corp, MAG Silver Corp, Ssr Mining and First Majestic Silver Corp have seen increases between 3 to 4%.

Brp Inc, a consumer discretionary stock, rose more than 6%, even though it reported a lower net income of C$188.2 million or C$2.46 per share for its fourth quarter, compared to C$365.1 million or C$4.54 per share than the same quarter the previous year. Revenue for the quarter also decreased to C$2.692 billion from C$3.076 billion from the prior year. However, for the fiscal year 2025, BRP predicts normalized earnings per share between $7.25 to $8.25, with the year's revenue expected between $9.1 billion and $9.5 billion.

Other companies such as Canada Goose Holdings and Gildan Activewear are also experiencing a financial uplift, seeing an increase of 3% and 1.5% respectively. Meanwhile, Sleep Country Canada Holdings, Canadian Tire Corp, Spin Master, and Restaurant Brands International have witnessed increases ranging from 0.6 to 1%.