Stocks Start out Wednesday on Right Foot

Snowflake Debuts



Equities in Canada’s largest market rose on Wednesday, boosted by higher oil prices, while investors expected the U.S. Federal Reserve to keep interest rates low when it announces its policy decision later during the session.

The TSX gained 25.52 points to begin Wednesday at 16,456.79.

The Canadian dollar gained back 0.08 cents to 75.88 cents U.S.

An environmental working group called for billions in spending over the next five years to spur a green economic recovery, a week before Prime Minister Justin Trudeau is due to outline his own plan to parliament.

On the economic beat, Statistics Canada’s consumer price index rose 0.1% on a year-over-year basis in August, matching the increase in July. On a seasonally adjusted monthly basis, the CPI rose 0.1% in August, up from a 0.1% decline in July.

Also, foreigners reduced their holdings of Canadian securities by $8.5 billion in July. Meanwhile, Canadian investors acquired $1.3 billion of foreign securities, down considerably from a $10.6 billion investment in June.

ON BAYSTREET

The TSX Venture Exchange added 3.44 points to 745.35.

All but three of the 12 TSX subgroups were higher in the first hour, with energy, ahead 1.6%, while health-care and real-estate each took on 1%.

The three laggards were consumer discretionary issues, down 0.9%, while information technology gave back 0.3%, and gold dulled in price 0.1%/.

ON WALLSTREET

Stocks rose on Wednesday as investors braced themselves for the Federal Reserve’s latest decision on monetary policy.

The Dow Jones Industrials climbed 115.07 points to 28,110.67.

The S&P 500 took on 12.85 points to 3,414.05.

The NASDAQ progressed 35.96 points, or 1.2%, to 11,226.29.

Better-than-expected earnings from FedEx boosted sentiment. FedEx released a blowout quarter with earnings $2.18 per share above analyst estimates, fueled by the e-commerce boom. The shipping company rallied more than 7%.

The Federal Open Market Committee will provide its quarterly update on its estimates for GDP, unemployment and inflation. The central bank could provide clearer guidance on what it will take to raise rates in the future. The Fed is also expected to keep rates unchanged.

Wednesday marks the Fed’s first decision since Chairman Jerome Powell unveiled a policy shift toward greater tolerance of inflation, effectively pledging to keep interest rates low for longer. Investors widely expect the central bank to maintain its downbeat stance on the economy. This will also be the last meeting before the U.S. presidential election.

In corporate news, one of the hottest initial public offerings of 2020 will open for trading on Wednesday. Data storage software company

Snowflake is priced at 30 times forward revenue and even got a rare vote of confidence from Berkshire Hathaway. Snowflake expects to go public at a share price between $100 and $110, according to an updated S-1 filing from Monday.

Prices for the 10-Year Treasury were higher, weighing yields to 0.67% from Tuesday’s 0.68%. Treasury prices and yields move in opposite directions.

Oil prices increased $1.14 to $39.42 U.S. a barrel.

Gold prices regained $6.30 to $1,972.50 U.S. an ounce.