Canada’s main stock index finished strong on Wednesday, after the Bank of Canada maintained its key overnight interest rates as expected but cut domestic and global growth forecasts. Upward momentum in techs and gold stocks powered the surge.
The TSX Composite Index jumped 83.29 points to conclude Wednesday trading at 16,501.43
The Canadian dollar slumped 0.42 cents to 75.96 cents U.S.
In techs, Kinaxis jumped $2.68, or 3.3%, to $83.31, while Shopify raised itself $10.99, or 2.7%, to $420.35.
In golds, Alacer was propelled 55 cents higher, or 9.6%, to $6.27, while Wesdome Gold spread its wings 67 cents, or 9.4%, to $7.78.
Communications had a banner day as well, with Shaw picking up 54 cents, or 2.1%, to $26.70, while Quebecor collected 52 cents, or 1.7%, to $30.49.
Energy scaled back, with Enerplus dropping 40 cents, or 4.8%, to $7.93, while MEG Energy doffed 23 cents, or 4.3%, to $5.07
In consumer staples, Maple Leaf Foods dropped without a parachute, losing $3.95, or 13.6%, to $25.04, while Premium Brands docked $1.34, or 1.5%, to $86.64.
The Bank of Canada today maintained its target for the overnight rate at 1.75% The Bank Rate is correspondingly 2% and the deposit rate is 1.5%
The central bank said Canada’s economy would shrink by about 4.5% by 2021 if a global slowdown became more pronounced because of a higher-than-expected degree of uncertainty.
ON BAYSTREET
The TSX Venture Exchange was unchanged at 538.25
All but two of the 12 Toronto subgroups were higher on the day, with gains by information technology of 1.8%, while gold triumphed 1.2%, and communications bettered themselves 1.1%.
The two laggards were energy, down 1.4%, and consumer staples, inching back 0.1%.
ON WALLSTREET
Stocks rose on Wednesday as investors cheered the Federal Reserve’s third rate cut of the year and comments from Chairman Jerome Powell that signaled it would be a while before the central bank hikes rates.
The Dow Jones Industrial Average dug itself out of negative territory Wednesday afternoon, and climbed 115.27 points to 27,186.09
The S&P 500 regained 9.88 points to 3,046.77, yet another all-time record.
The NASDAQ Composite Index re-strengthened 27.12 points to 8,303.97
Powell and the Fed struck just the right tone to satisfy equity investors by signaling it would pause rate cuts, but wouldn’t think of hiking again until inflation moved higher.
Utilities and health care were the best-performing sectors in the S&P 500, utilities rising 0.9% and health-care up 0.8%. General Electric was among the S&P 500's biggest advancers on the back of strong earnings.
Johnson & Johnson outperformed all other Dow stocks, rising 2.9% after the company said it found no asbestos in its baby powder after testing.
The corporate earnings season also continued Wednesday with General Electric posting results that topped analyst expectations. GE also raised its forecast for 2019 cash flow, sending its stock up 11.5%.
CME Group and ADP also reported better-than-expected earnings. Apple, Facebook, Starbucks and Lyft are among the companies set to release their results after the bell.
So far, the corporate earnings season has been better than feared. Of the S&P 500 companies that have reported, 74% have posted better-than-expected
The Commerce Department said U.S. Gross Domestic Product grew by 1.9% in the third quarter, topping expected growth of 1.6%. The better-than-expected print was driven by continued consumer spending along with government expenditures.
U.S. private payrolls increased by 125,000 in October, according to ADP and Moody’s Analytics. That topped a Dow Jones estimate of 100,000. However, September payrolls were trimmed down by 42,000 to 93,000.
Prices for the benchmark 10-year U.S. Treasury were up, lowering yields to 1.77% from Tuesday’s 1.83%. Treasury prices and yields move in opposite directions.
Oil prices slipped 64 cents to $54.90 U.S. a barrel.
Gold prices gained $7.50 to $1,498.20 U.S. an ounce.
