The Toronto stock market rose to another record close Monday as Canadian Prime Minister Justin Trudeau and U.S. President Donald Trump vowed to work at strengthening economic ties on both sides of the border.
The two heads of state issued a joint statement following their first face-to-face meeting at the White House, reiterating that both countries share similar priorities, including the need to bolster trade.
When asked how Canada would be impacted by potential changes to the North American Free Trade Agreement, Trump told reporters that his bigger concern was the Mexican portion of the trade deal and the goal would only be to “tweak” those elements affecting Canada in order to better streamline cross-border trade.
There had been concerns about Trump’s plans after he previously remarked that he wanted to renegotiate NAFTA and hinted that he supports protectionist measures.
More than $2 billion in trade happens between Canada and the U.S. each day.
Canadian markets strategist Craig Fehr says the comments following the meeting showed that the two leaders were “largely on the same page” on various issues, including the mutual benefits of trade between the two economies.
“For those looking at it from a Canadian perspective, this meeting can perhaps be viewed as a sigh of relief _ particularly when you compare it to what the rhetoric was on the (Trump) campaign trail where it was much more positioned as NAFTA being unilaterally a bad deal,” said Fehr, who is with Edward Jones in St. Louis.
“This is a confirmation that campaign rhetoric was just that, and that the actual execution of any trade agreements or renegotiations are going to be far less harsh than what the original assertions may have suggested.”
Investors seemed to applaud the outcome. On Bay Street, the S&P/TSX composite index hit a record close for a second consecutive session after climbing a moderate 27.46 points at 15,756.58 _ with gains from metals and retail stocks offsetting losses from the gold and energy sectors.
South the border, the main New York indices finished at record highs for a third session in a row. The Dow Jones industrial average was up 142.79 points at 20,412.16, the S&P 500 was ahead 12.15 points at 2,328.25, and the Nasdaq composite jumped 29.83 points at 5,763.96.
Fehr said although this meeting may be one of the most successful Trump has had with another head of state so far, investors may still be wary about driving up stock markets any higher than they’ve already been.
“It is too early. The press conference and the meeting is the first step in a long process of ultimately reaching trade deals over long periods of time that will be beneficial to both countries,” he said.
“We can’t take today’s meeting as the end point. It’s probably more of a starting point, but it’s a pretty good start in terms of setting the right tone for what a mutually beneficial relationship can and should be moving forward.”
Meanwhile in currencies, the Canadian dollar was barely changed at US76.48¢, up 0.06 of a U.S. cent.
Commodities were mostly lower with the March crude contract down US93¢ at US$52.93 per barrel and March natural gas falling US9¢ at US$2.94 per mmBTU.
April gold declined US$10.10 at US$1,225.80 an ounce and March copper contracts were up US2¢ at US$2.78 a pound.