But history suggests bear markets usually take time to find a floor
North American equities rebounded at the opening of trade Tuesday after last week’s rout erased nearly US$2 trillion from the S&P 500. Treasuries retreated.
The S&P 500 added 2.1 per cent, led by energy and technology shares, while the Nasdaq 100 rose 2.4 per cent following the long weekend. Revlon Inc. gained 9.9 per cent in the wake of its Chapter 11 bankruptcy filing, and Kellogg Co. was up 4.3 per cent after plans to separate into three companies. The drop in Treasuries took the benchmark 10-year yield back toward 3.3 per cent.
Sentiment this week is being helped by comments from President Joe Biden that a U.S. recession isn’t “inevitable,” but the outlook remains perilous for investors weighing whether the market has bottomed. History suggests bear markets usually take time to find a floor, especially when they are accompanied by a recession, as happened in 2008’s financial crisis.
Elsewhere, crude oil gained. Bitcoin scaled $21,000 as cryptocurrencies got a reprieve from recent turbulence. The dollar dipped and the yen hovered near a 24-year low, sapped by the contrast between a super-dovish Bank of Japan and a hawkish Fed.
European stocks extended a second day of gains, with automakers leading the advance in the benchmark Stoxx 600 Index.
Canada’s main stock index also opened higher on Tuesday, as energy shares rose tracking crude prices, although concerns over a global recession limited gains.
At 9:47 a.m. ET (1347 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 100.77 points, or 0.53 per cent, at 19,284.4.
The energy sector climbed 2.2 per cent as oil prices rose almost $2 on high summer fuel demand while supplies remain tight because of sanctions on Russian oil after its invasion of Ukraine.
“Oil stocks were pounded pretty heavily Thursday and Friday and they probably got fairly oversold. So it’s not unusual to see a second day of bounce and it’s actually a good thing,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.
The TSX tumbled 6.6 per cent last week, its biggest weekly drop since March 2020.
Additional reporting by Reuters