Canada’s main stock index hovered near four-week highs on Thursday, amid broad-based sectoral gains, while investors awaited U.S. employment data to gauge the trajectory of interest rate cuts in the world’s largest economy. At 10:54 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 11.25 points, or 0.05%, at 22,234.92 U.S. markets were closed for Independence Day. All eleven major Canadian sectors gained during the session, with communication services leading with a 0.9% rise. The materials sector, which includes precious and base metals miners and fertilizer companies, was up 0.1% as gold prices hovered near two-week highs.
“The hopes of interest rate decreases have been very positive for the resource sector,” said Graham Priest, investment advisor at BlueShore Financial. Data showed that Canada’s services PMI fell to a three-month low in June, as a decline in new business weighed on the sector’s performance even as inflation pressures cooled. On Friday, investor attention will be on the U.S. non-farm payrolls data as it could add to expectations of interest rate cuts as early as September from the Federal Reserve. “The economy is still in good shape and I think the Fed is not going to want to lower interest rates that can trigger inflation again,” Priest added. “They are going to ensure that inflation is indeed down at the 2% target.”
Market participants are pricing in a 72.5% chance of rate cuts by the Fed in September. Meanwhile, the Bank of Canada (BOC), that typically mirrors the Fed, has traders seeing a 41.8% chance of another cut in July. Among individual stocks, goeasy slid 7.3% to the bottom of the TSX after announcing its top boss Jason Mullins will transition out of his role World stocks clocked up more record highs on Thursday after U.S. data narrowed the odds on a September Fed interest rate cut, while Europe was on politics watch again as UK voters headed to the polls in national elections.
