Equities in Toronto were muted on Wednesday as energy stocks slid on lower crude oil prices, while the Bank of Canada delivered another supersized but unsurprising 75-basis-point rate hike.
The TSX poked into the green 55.54 points to move into Wednesday’s lunch hour at 19,143.69.
The Canadian dollar slid 0.07 cents to 75.94 cents U.S.
Economically speaking, Canada's merchandise exports decreased 2.8% in July, while imports were down 1.8%.
As a result, Canada's merchandise trade surplus with the world narrowed from $4.9 billion in June to $4.1 billion in July. So far in 2022, trade surpluses have been observed in every month.
The Bank of Canada increased its target for the overnight rate to 3.25%, a hike of three quarters of a percentage point, with the Bank Rate at 3.5% and the deposit rate at 3.25%.
The IVEY PMI registered at 60.9 in August, a sharp increase from July's 49.6, but still below the 66 figure from August 2021.
ON BAYSTREET
The TSX Venture Exchange restored 3.22 points to 626.79.
All but three of the 12 TSX subgroups were higher midday, with gold soaring 2.7%, materials better by 1.6%, and health-care up 1.4%.
The three laggards were energy, tumbling 2.4%, communications, off 0.2%, and consumer staples, inching up 0.04%.
ON WALLSTREET
Stocks rose Wednesday — trying to shake off a three-week slide — as rates and oil prices eased, cooling investor concerns about continued high inflation.
The Dow Jones Industrials regained 185.02 points to kick off the session at 31,330.32
The S&P 500 recaptured 27.39 points to 3,935.58
The NASDAQ Composite served notice it wanted an end to its seven-day losing streak, grabbing 90.72 points to 11,635.63.
The moves reversed an earlier dip into negative territory in futures trading. Stock futures slumped after a Wall Street Journal article suggested that Federal Reserve Chairman Jerome Powell’s commitment to reduce inflation could mean that the central bank hikes rates by 0.75 percentage points in September, which would be the third consecutive increase of that size.
On Wednesday, the Federal Reserve will give its summary on current economic conditions, also known as the Beige Book. Elsewhere, Fed presidents Loretta Mester of Cleveland and Tom Barkin of Richmond, as well as Fed Vice Chair Lael Brainard are scheduled to speak at various events.
Markets have been hoping that the Fed would start to hand out smaller increases starting in September, but are now pricing in an 86% chance of a 0.75-percentage-point hike.
Shares of Twitter jumped 4.5% Wednesday morning after a Delaware court denied Elon Musk’s request to delay the trial over his attempt to back out of buying the company for $44 billion. The trial is expected to begin Oct. 17.
Treasury prices withered, raising yields to 3.28% from Tuesday’s 3.34%. Treasury prices and yields move in opposite direction.
Oil prices dropped $4.38 to $82.50 U.S. a barrel.
Gold prices regained $8.60 to $1,721.50 U.S. an ounce.
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