TORONTO — Canada's main stock index was down less than 10 points in Tuesday trading ahead of an interest rate announcement on Wednesday, while U.S. stock markets were mixed.
The S&P/TSX composite index was down 6.63 points at 24,716.70.
In New York, the Dow Jones industrial average was down 6.71 points at 42,924.89. The S&P 500 index was down 2.78 points at 5,851.20, while the Nasdaq composite was up 33.12 points at 18,573.13.
The flatter day comes after six weeks in a row where the major indexes trended upward, said Brianne Gardner, senior wealth manager of Velocity Investment Partners at Raymond James Ltd.
In Canada, all eyes are on Bank of Canada governor Tiff Macklem ahead of the central bank's interest rate decision and economic forecast.
The central bank's policy interest rate is currently set at 4.25 per cent following three consecutive decisions to lower it by a quarter percentage point, but most observers are expecting the central bank to make a larger cut of half a point this time around.
Gardner said Macklem's language surrounding the decision and potential future rate cuts will be key to watch. She said it’s up to the Bank of Canada to determine a suitable rate cut path “to ensure that our economy does not go into a recession.”
“We know cuts are coming. It just now is how quickly these cuts are going to be coming,” she said.
“That will be front and centre for all Canadians, especially with how heavy we are as a real estate economy.”
Gardner added that further rate cuts would benefit sectors such as REITs, utilities, pipelines and bank stocks.
Meanwhile south of the border, a turbulent few weeks likely lie ahead in the lead-up to the Nov. 5 presidential election. As a result, Gardner said stock portfolios tend to shift “a little bit more defensive” in the short-term.
“If history is a guide to anything, the few weeks before the U.S. election we often do see a spike in volatility,” she said.
“With such a close race, this may even magnify any volatility that we do see in the market, but usually after we get that confirmation of who the next president is, we do tend to see a year-end rally through November, December.”
Earnings season also kicked into gear in the U.S. this week, with more than four-in-five companies so far reporting positive earnings per share surprises.
That signals “a reassuring picture for a little bit more of a resilient economy,” said Gardner.
“If earnings continue to grow at the rate that they are and profitability of these companies are still (seeing) positive momentum, that can continue to push the indexes higher, and that is what is really driving markets higher.”
The Canadian dollar traded for 72.33 cents US compared with 72.28 cents US on Monday.
The December crude oil contract was up US$1.70 at US$71.74 per barrel and the November natural gas contract was unchanged at US$2.31 per mmBTU.
The December gold contract was up US$20.90 at US$2,759.80 an ounce and the December copper contract was up two cents at US$4.38 a pound.
This report by The Canadian Press was first published Oct. 22, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Sammy Hudes, The Canadian Press
