Newspaper article The Canadian Press

TSX Set for Further Gains as Investors Wonder If Energy Sell-Off Overdone

Newspaper article The Canadian Press

TSX Set for Further Gains as Investors Wonder If Energy Sell-Off Overdone

Article excerpt

TSX set for more gains after 4 winning weeks


TORONTO - The Toronto stock market could be in for further gains this week, feeding off last week's fourth consecutive advance on the TSX amid economic data that showed steady employment growth in the United States and a rebound in oil prices off three-year lows.

Otherwise, it looks to be a relatively quiet week for economic data as Canada's quarterly earnings season also starts to wind down after a string of well-received reports that helped the Toronto market claw itself partway back from the worst of the October sell-off.

The TSX ended last week up 0.5 per cent or 78 points, leaving the market up 7.85 per cent for the year. The Dow industrials jumped 184 points or 1.05 per cent.

The gain came amid a muted response to American jobs data that narrowly missed expectations as 215,000 positions were created in October, a bit shy of the 235,000 that had been forecast.

The TSX energy sector was a star performer, rising about three per cent at the end of a volatile week where oil prices hit the lowest levels since 2011 as buyers reasoned the recent sell-off of energy companies had been overdone.

"I am surprised that oil has sold off as hard as it has," said Chris King, portfolio manager at Morgan, Meighen and Associates.

"The pendulum always swings too far and that's certainly the case here."

King said consumers shouldn't get too comfortable about oil prices moving below US$80 a barrel.

"We're definitely not in for an era for that. Oil really should be back in the $95 level based on supply and demand."

The pendulum had swung hard the other way last the summer when prices hit around US$105 a barrel, leaving the energy sector up about 20 per cent year to date before stocks started to sell off in Canada and the U.S. in September.

The energy sector is still down year to date, with prices depressed by a U. …

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