Canada's main stock index broadly fell on Wednesday, taking cue from stocks worldwide, as investors awaited the U.S. Federal Reserve's policy statement that could show how comfortable the central bank would be in holding interest rate steady.
The S&P/TSX Composite Index made headway against the breakeven point, falling short only 12.02 points by Wednesday’s lunch hour to 16,176.08
The Canadian dollar dipped 0.03 cents at 75.02 cents U.S.
The largest percentage gainer on the TSX was Westshore Terminals Investment, which jumped 85 cents, or 4.6%, to $19.20. Its gains were followed by Alacer Gold, which rose four cents, or 1.1%, to $3.82
Franco-Nevada Corp fell $5.28, or 5.2%, the most on the TSX, to $95.62, after reporting quarterly results. The second biggest decliner was Bausch Health Companies Inc, down $1.61, or 4.6%, to $33.39.
As part of Tuesday’s federal budget, Finance Minister Bill Morneau said Canada will create a national drug agency to help cut the cost of prescription medications as part of a plan to broaden the state-funded healthcare programme.
Moreover, the government will issue nearly 20% more bonds in the coming fiscal year to help the Liberal government fund its spending programmes, ahead of an October election.
ON BAYSTREET
The TSX Venture Exchange squeezed higher 0.5 points to 636.57
All but three of the 12 TSX subgroups were lower, with gold and materials down 1.1% each, and consumer discretionary docked 0.9%
The three gainers were energy, ahead 1.1%, consumer staples, up 0.2%, and communications, eking up 0.1%.
ON WALLSTREET
Stocks slipped on Wednesday as a decline in FedEx tempered sentiment while investors braced themselves for a key Federal Reserve announcement.
The Dow Jones Industrial Average slumbered 106.34 points midday to 25,781.04, as Goldman Sachs lagged.
The S&P 500 sagged 10.95 points to 2,821.62, as the health-care and materials sectors lurched lower.
The NASDAQ Composite slumped 23.67 points to 7,700.28
FedEx shares fell more than 5% after CFO Alan Graf warned in the company's quarterly report that "slowing international macroeconomic conditions and weaker global trade growth trends continue, as seen in the year-over-year decline in our FedEx Express international revenue."
That warning was followed by UBS CEO Sergio Ermotti saying this is one of the worst first-quarter environments ever as investment banking revenue falls about a third from the year-earlier period. Meanwhile, German auto maker BMW said its earnings could fall significantly in 2019 and added it will cut $13.6 billion in costs.
These negative comments come as the U.S. central bank is widely expected to keep rates steady later in the session, with investors monitoring a decision on the Fed's rate projections for the next few years.
Stocks are up more than 12% this year in large part because the Fed said in January it would be "patient" in raising rates this year. However, Wall Street could be setting itself up for a letdown if the Fed does not indicate there will be no rate hikes this year as investors have priced in extremely favorable monetary policy conditions.
Prices for the benchmark 10-year U.S. Treasury gained ground, lowering yields to 2.59% from Tuesday’s 2.61%. Treasury prices and yields move in opposite directions.
Oil prices regained 96 cents to $59.99 U.S. a barrel.
Gold prices gave back $3.40 to $1,303.10 U.S. an ounce.
