Photo: The Canadian Press

TORONTO — Overflowing investor optimism that the pandemic’s gloom will soon lift pushed Canada’s main stock index and two of three indexes in the United States to record closes on Friday.

The S&P/TSX composite index was up 29.40 points at 19,351.32, a gain of 123.29 points for the week.

In New York, the Dow Jones industrial average was up 164.68 points at a record 34,200.67 and the S&P 500 index gained 15.05 points at a record 4,185.47. Meanwhile, the Nasdaq composite was up 13.58 points at 14,052.34.

“We’ve had a good week of economic data that for the most part has been a surprise to the upside, whether it be the regional manufacturing data, whether it’s the retail sales … today we had housing starts,” said Philip Petursson, chief investment strategist at Manulife Investment Management.

“So that does reaffirm the positive tone toward the economic reopening we’re seeing in the United States that’s probably going to cascade around the world as the vaccinations continue to increase in availability.

“Around the world, you’re seeing a similar trend, strength in equity markets backed by an economic recovery that’s emerging that’s going to drive earnings growth significantly higher.”

The upcoming Canadian federal budget on Monday has had a muted effect on markets so far, mainly seen in bond yields, Petursson said.

“We’ll be paying attention to any fiscal support to the consumer,” he said.

“The lockdowns have taken a bit of a toll on confidence and, in order to have a good recovery … there will need to be some kind of support.”

The Canadian dollar traded for 79.98 cents US Friday compared with 79.81 cents US on Thursday.

Petursson said the loonie is catching up to where it should be in relation to the oil price.

“The Canadian dollar has been one of the strongest currencies relative to the U.S. dollar, if not the strongest year-to-date,” he said. “We see oil prices sustaining at this level and what that means is the gap between where the Canadian dollar is and where it should be based on today’s oil price leads us to between 81 and 83 cents.”

Above 82 cents, he said, the Bank of Canada gets nervous due to the impact on manufactured exports, but it may have to tolerate it because it can’t lower rates much below current levels.