June 21st, 2024

TSK ekes out gain after August GDP report, U.S. markets rise ahead of rate decision

By Rosa Saba, The Canadian Press on October 31, 2023.

The Bay Street financial district is shown in Toronto on Friday, August 5, 2022. THE CANADIAN PRESS/Nathan Denette

TORONTO – Canada’s main stock index eked out a small gain on Tuesday despite weakness in metals and utilities stocks, while U.S. markets rose the day before the central bank is set to make a decision on interest rates.

The S&P/TSX composite index closed up 16.71 points at 18,873.47.

In New York, the Dow Jones industrial average was up 123.91 points at 33,052.87. The S&P 500 index was up 26.98 points at 4,193.80, while the Nasdaq composite was up 61.76 points at 12,851.24.

Statistics Canada released its August gross domestic product report Tuesday. The Canadian economy was flat for the month, and a preliminary estimate showed a small contraction in the third quarter.

The report wasn’t really a surprise, said Greg Taylor, chief investment officer at Purpose Investments.

“I think when you look at the performance of the markets, and particularly the banks, I think everyone was realizing that the trend was slowing down,” he said.

“At minimum, this just signals that the Bank of Canada really has to be on hold here.”

The Bank of Canada recently announced it was holding its key rate steady as the effects of its breakneck hiking cycle continue to work their way through the markets.

Markets in Canada didn’t react dramatically to the GDP report, barely making it into the green.

“The markets have had a rough month, or rough few months,” said Taylor.

Markets also ticked higher in the U.S. ahead of a slew of expected news later in the week.

One thing investors will be watching is the third-quarter earnings release from Apple on Thursday, which Taylor said is a big sentiment indicator.

On Wednesday, the U.S. Federal Reserve is slated to announce its interest rate decision. Analysts have been saying the central bank will likely hold its key rate, echoing the Bank of Canada.

There’s also some important U.S. economic data coming later in the week, including payrolls on Friday, said Taylor. Investors will be eyeing those numbers for an indication of what’s to come with the central bank’s monetary policy, he said.

The Canadian dollar traded for 72.09 cents UScompared with 72.29 cents US on Monday.

The December crude contract was down US$1.29 at US$81.02 per barreland the December natural gas contract was up 22 cents at US$3.58 per mmBTU.

The December gold contract was down US$11.30 at US$1,994.30 an ounceand the December copper contract was down one cent at US$3.65 a pound.

This report by The Canadian Press was first published Oct. 31, 2023.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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