TORONTO — Canada's main stock index finished slightly higher Friday, helped by strength in the real estate sector, while U.S. markets were closed for the Fourth of July.
The S&P/TSX composite index was up 1.90 points at 27,036.16.
Brent Joyce, chief investment strategist and managing director at BMO Private Investment Counsel Inc., said in an interview that gains in real estate stocks are "interest rate driven," adding that it appears likely the U.S. Federal Reserve will be cutting interest rates in July.
"Real estate is certainly going to be keying off of interest rates in the short term. In Canada, real estate's a lot of different things, if you think about the logistics area, the warehousing and industrial side of the real estate sector.
"If it's appearing like we're going to have a better outcome than certainly several weeks ago on U.S.-Canada trade, then that's going to boost that part of the real-estate sector as well."
Joyce added that the TSX moving above the 27,000 mark is "psychologically important."
"Eleven of the past 13 weeks now we've had advances. With an almost unbroken string of advances for the past three months since April. You've got momentum in these indices; getting through that round number level is a psychological barrier that now could propel things higher," he said.
Going forward, Joyce said he expects more gains on the TSX, reaching beyond the 28,000 mark toward the end of the year. Growth on the TSX, he said, could be driven by both valuation and earnings.
In contrast, he said U.S. markets are likely to need earnings growth to justify higher valuation levels.
Joyce highlighted a higher degree of certainty in markets following the passing of the massive tax and spending cuts package by the U.S. House of Representatives.
He said the next thing for markets to look for is looming trade deals as the clock ticks on U.S. President Donald Trump’s July 9 tariff deadline.
On U.S.-Canada trade relations, Joyce said Canada went from being "public enemy No. 1" a few months ago to "let's just be friends."
"We've digested that there's going to be some level of tariffs, I think, between Canada and the U.S. And if it comes in better than that, which I think there's a good chance that it can, then this market certainly is going to react positively to that," he said.
He added that tariff uncertainty may cast a fog over upcoming earnings releases in the U.S. for the third quarter.
"We're moving into U.S. earnings season next week and beyond ... I think we're going to have a bit of fog that the market is prepared to look through here, tariff front running, uncertainty, some decisions being delayed perhaps over the past couple of months," Joyce said.
He said markets may "give companies a bit of a pass" on the quarter, given some of the uncertainty, and instead look at guidance for the end of the year and into next year.
The Canadian dollar traded for 73.50 cents US compared with 73.66 cents US on Thursday.
The August crude oil contract was down 50 US cents at US$66.50 per barrel.
The August gold contract was up US$3.60 at US$3,346.50 an ounce.
The commodities prices are snapshots only as there are no settle prices on U.S. holidays.
This report by The Canadian Press was first published July 4, 2025.
— With files from The Associated Press.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Daniel Johnson, The Canadian Press
