TSX Catches Fire on Prospect of More Rate Cuts

The prospect of more, and more major, interest rate cuts stimulated stock markets Wednesday, with Toronto indexes taking advantage.

The TSX Composite Index hiked 122.12 points to close Wednesday at 24,561.20

The Canadian dollar moved ahead 0.16 cents to 72.72 cents U.S.
The BoC has offered three quarter-point cuts this year and traders see a 79.3% chance for a 50-basis-point cut at the policy meeting next week.
In corporate news, U.S. fund Artisan Partners urged the board of Japanese retailer Seven & i Holdings to allow due diligence and negotiate a purchase price on Canada's Alimentation Couche-Tard's $47 billion takeover bid. Couche-Tard shares climbed $1.28, or 1.8%, to finish up at $74.28.

Elsewhere, Saudi Arabia's Manara Minerals is in advanced talks to buy a minority stake in First Quantum Minerals' Zambian copper and nickel assets. Shares of First Quantum rose 35 cents, or 2% Wednesday to $17.82.

Utilities fared the best of all, with Brookfield Renewable Partners shooting ahead $3.48, or 9.5%, to $39.01, while Brookfield Infrastructure Partners climbed $2.16, or 4.6%, to $49.19.

In health-care plays, Chartwell Retirement Residences acquired 30 cents, or 1.9%, to $15.80, while Sienna Senior Living obtained 20 cents, or 1.2%, to $17.08.

Real-estate stocks went north, with Allied Properties REIT units surging 55 cents, or 2.8%, to $20.31, while Killam REIT jumped 33 cents, or 1.7%, to $20.32.

Tech stocks, however, flattened some of the gains, as Descartes Group lost $2.27, or 1.5%, to $145.73, while Celestica dropped $4.09, or 4.9%, to $80.16.

In energy, Baytex Energy stalled 15 cents, or 3.6%, to $4.01, while Nuvista Energy slid 39 cents, or 3.6%, to $10.42.

On the economic slate, the Canadian Real Estate Association says home sales recorded over Canadian MLS® Systems climbed 1.9% on a month-over-month basis in September 2024, reaching their highest level since July 2023 in September. Statistics Canada reports manufacturing sales declined 1.3% in August, largely on lower sales of primary metals as well as petroleum and coal products. The declines were partially offset by higher production of aerospace products and parts.

Canada Mortgage and Housing Corporation said the seasonally-adjusted annualized rate of housing starts rose to 223,808 units from a revised 213,012 units in August.

ON BAYSTREET

The TSX Venture Exchange recovered 6.22 points, or 1%, to 606.64.

All but two of the 12 TSX subgroups gained Wednesday, with utilities clicking 2.4%, health-care soaring 1%, and real-estate taking on 0.9%.

The two laggards were information technology and energy, each off 0.5%.

ON WALLSTREET

The Dow Jones Industrial Average traded higher on Wednesday as it tried to recover its footing following a selloff in the previous session.

The 30-stock index surged 337.02 points to 43,077.44.

The S&P 500 index regained 27.2 points to 5,842.46.

The NASDAQ Composite revived 51.49 points to 18,367.09.

Morgan Stanley rose 7% after topping Wall Street estimates for both its third-quarter earnings and revenue. United Airlines also reported better-than-expected results and forecast strong numbers for the last quarter of 2024, sending shares 15% higher.

The reporting period is off to a solid start. About 50 S&P 500 stocks have posted third-quarter earnings thus far, with 79% of those beating expectations, FactSet data shows.

Prices for the 10-year Treasury gained, lowering yields to 4.01% from Tuesday’s 4.03%. Treasury prices and yields move in opposite directions.

Oil prices were lower five cents to $70.53 U.S. a barrel.

Gold prices added $11.20 to $2,690.10 U.S. an ounce