The reopening train is still moving forward
On the first trading day after Easter, Canada's main stock index climbed to a record high, carried aloft by the gravitational pull of American economic renewal. Nearly a million jobs added south of the border in a single month, combined with a surging services sector, reminded investors that the long pandemic contraction may at last be reversing. The moment captured something larger than a number on a screen — it was markets registering, however imperfectly, the collective exhale of an economy beginning to breathe again.
- U.S. employers added 916,000 jobs in March — the strongest month since August — and the news spent a long weekend gathering force before markets could act on it.
- When Toronto's exchange reopened Monday, fresh data showing record American services sector growth arrived alongside the jobs report, and the combination proved too compelling to resist.
- Materials and technology led the charge, with copper, lumber, and recovering tech stocks signalling that investors were pricing in a reopening boom — but energy fell sharply, down 2.46%, as oil slipped nearly three dollars a barrel, exposing a market divided on how quickly demand would truly return.
- All three major American indexes also hit record territory, and one analyst pointed to Delta Air Lines cancelling flights due to staff shortages as an unlikely symbol of the moment — a problem born from demand arriving faster than anyone planned.
- A note of caution lingered beneath the optimism: the second half of 2021 may test the rally as stimulus winds down and governments confront the debts accumulated during the crisis.
Monday's session in Toronto carried Canada's S&P/TSX composite into uncharted territory, closing at 19,026.79 — a new record — after markets reopened from the Easter weekend. The catalyst had arrived on Friday, when U.S. employers reported adding 916,000 jobs in March, the best month since August. Investors sat with that news over the long weekend, and when trading resumed it was joined by data showing the American services sector had surged, with orders, hiring, and prices all climbing sharply. The combination proved irresistible.
Across the border, the Dow, S&P 500, and Nasdaq all reached record territory as well. Allan Small of IA Private Wealth read the signals plainly: the reopening was accelerating faster than expected, and pent-up demand from a year of lockdowns was beginning to show up in real revenue. He pointed to Delta Air Lines cancelling roughly 100 flights due to staff shortages — an unlikely emblem of demand arriving faster than supply could meet it — and predicted Canadian carriers would soon face the same welcome problem.
In Toronto, seven of eleven sectors finished higher. Materials led the way as copper climbed and lumber prices hit records, lifting Era Copper, First Quantum, Canfor, and Interfor. Technology staged a modest recovery after weeks of stumbling, with BlackBerry jumping over eight percent. But energy told a different story: crude fell nearly three dollars a barrel to US$58.65, dragging Vermilion Energy and Crescent Point down sharply, and leaving the sector off 2.46 percent overall.
Small found the technology rebound particularly encouraging — evidence that investors weren't abandoning the digital economy even as the physical world reopened. He expected the rally to continue as vaccination rates rose, but offered a measured caveat: enthusiasm might cool in the second half of 2021 as governments and central banks began reckoning with the debts accumulated during the pandemic. For now, though, the market was looking forward. The reopening trade was on.
Monday's trading session in Toronto brought Canada's main stock index to uncharted territory. The S&P/TSX composite closed at 19,026.79, up 36.47 points, marking a new record high after markets reopened following the Easter weekend. The momentum came from south of the border, where the U.S. labor market had delivered a jolt of confidence on Friday—employers added 916,000 jobs in March, the strongest month since August. That news sat in investors' minds over the long weekend. When trading resumed Monday, it was joined by fresh data showing the American services sector had surged in March, with orders, hiring, and prices all climbing sharply. The combination proved irresistible.
Canadian investors weren't alone in their optimism. The Dow Jones industrial average climbed 373.98 points to 33,527.19, while the S&P 500 rose 58.04 points to 4,077.91 and the Nasdaq gained 225.49 points to 13,705.59. All three American benchmarks reached record territory. Allan Small, a senior investment adviser at IA Private Wealth, captured the mood plainly: the market was reading these signals as confirmation that the reopening was accelerating. Companies were hiring faster than they'd expected to, and the pent-up demand from a year of lockdowns was beginning to show itself in real bookings and real revenue. He pointed to Delta Air Lines cancelling roughly 100 flights the previous day due to staff shortages—a problem born from unexpectedly strong demand for travel. Canadian airlines, he predicted, would soon face the same pleasant crisis.
In Toronto, seven of the eleven market sectors finished higher. The materials sector led the way, buoyed by rising commodity prices. Copper futures for May delivery climbed 15 cents to nearly US$4.14 per pound, lifting Era Copper Corp. shares by 5.96 percent and First Quantum Minerals by 5.89 percent. Forest product companies rode a wave of record lumber and panel prices: Canfor Corp. rose 3.65 percent and Interfor Corp. gained 3.33 percent. Technology stocks, which had stumbled in recent weeks, staged a modest recovery. BlackBerry jumped 8.17 percent and Tecsys climbed 4.24 percent, a sign that investors were regaining appetite for the sector that had powered much of the American rally.
But not every corner of the market shared in the celebration. The energy sector retreated as crude oil prices fell. May crude futures dropped US$2.80 to close at US$58.65 per barrel, while natural gas slipped nearly 13 cents to US$2.51 per mmBTU. Vermilion Energy lost 5.81 percent and Crescent Point Energy fell 5.31 percent as the sector overall declined 2.46 percent. The divergence was stark: materials and technology were pricing in a reopening boom, while energy was pricing in a world where demand might not return as quickly as the bulls hoped, or where supply remained ample.
Small saw the strength in technology as particularly encouraging. The sector's rebound suggested that investors weren't abandoning the digital economy even as the physical world reopened. He expected the rally to continue as vaccination rates climbed and more of the economy came back online. But he offered a note of caution: enthusiasm might fade in the second half of 2021 as life normalized and governments and central banks began reckoning with how to manage the enormous debts they'd accumulated during the pandemic. For now, though, the market was looking forward, not back. The Canadian dollar traded at 79.84 cents US, up slightly from 79.59 cents the previous Thursday. Gold futures for June delivery rose 40 cents to US$1,728.80 per ounce. The reopening trade was on.
Citações Notáveis
The market likes it, we're seeing a recovery. The reopening train is still moving forward and that's why the markets are higher today.— Allan Small, senior investment adviser at IA Private Wealth
They're having to hire back a lot of people a lot sooner than these companies actually anticipated, and we're going to see this in our country too.— Allan Small
A Conversa do Hearth Outra perspectiva sobre a história
Why did the energy sector fall when everything else was rising?
Oil prices dropped sharply that day—crude fell nearly three dollars a barrel. Energy companies move with the price of what they sell, so when crude weakens, their stocks follow. The market was pricing in a world where demand might not snap back as fast as the optimists hoped.
But shouldn't a reopening economy need more energy?
You'd think so. And maybe it will, eventually. But on that particular day, the market was more focused on the immediate supply picture and near-term demand signals. The materials and tech sectors were pricing in a boom. Energy was being more cautious.
What does it mean that Delta had to cancel flights because of staff shortages?
It means demand for travel came back faster than anyone expected. They couldn't staff the flights because they'd laid people off during the pandemic and couldn't rehire fast enough. It's a good problem to have if you're an airline, but it signals how pent-up that demand really was.
So the Canadian analyst thought this would happen here too?
Yes. He saw the same pattern playing out—companies would need to hire faster than they'd planned, and Canadian airlines would eventually face the same staffing crunch because people wanted to travel again.
Why does the strength in technology matter if we're reopening?
Because it suggests investors aren't betting that the digital economy gets abandoned once offices reopen. Tech had been weak, so seeing it rebound was a signal that people still believed in that sector's future alongside the physical reopening.