On September 4, Canada’s primary equity benchmark extended its winning streak to seven sessions, closing at a fresh all-time high as gains in technology and financial equities fueled investor optimism ahead of key labor market reports from the United States and Canada. These upcoming economic indicators are closely watched for signals on future monetary policy, particularly regarding potential interest rate reductions.
Barry Schwartz, head of investment strategy at Baskin Wealth Management, remarked that the resilience of the TSX has been remarkable, noting its consistent upward trajectory and favorable composition for the current investment climate.
Sectors tied to financial services, energy, and raw materials collectively represent 64% of the index’s total market weight. Among them, materials have surged over 50% since January, driven largely by rising gold prices that have lifted shares in precious metals mining.
Upcoming employment figures from both the U.S. and Canada, scheduled for release the following day, are expected to show moderate job growth. Such data could support continued monetary easing by the Bank of Canada and the U.S. Federal Reserve. To date, the Fed has implemented fewer rate cuts compared to its Canadian counterpart during this cycle. Should the American central bank adopt a more aggressive easing stance in the coming months, it could further propel equity markets upward, according to Schwartz.
Additional gains were seen in consumer discretionary stocks, which rose 1%, while financial firms added 0.7%. Real estate also advanced 1.1%, supported by a decline in long-term borrowing costs. Meanwhile, the yield on Canada’s 10-year government bond dipped to 3.340%, its lowest level in two months.
— news from Reuters
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TSX ends higher for seventh straight day as tech shares climb
Sept 4 (Reuters) – Canada ‘s main stock index rose to another record high on Thursday, as technology and financial shares notched gains ahead of U.S. and Canadian employment data that guide expectations for interest rate cuts. n nSign up here. n n”The TSX won ‘t quit,” said Barry Schwartz, chief investment officer at Baskin Wealth Management. “It ‘s like every day it ‘s hitting a record high and it seems to have the right mix for this kind of market.” n nFinancials, energy and materials account for 64% of the TSX ‘s weighting, with the last mentioned up more than 50% since the start of the year as soaring gold prices boosted metal mining shares. n nU.S. and Canadian employment data are set for release on Friday, with economists forecasting modest job gains that could leave the door open to the BoC and the Federal Reserve resuming their easing campaigns. n nThe Fed has cut interest rates much less than the Bank of Canada in the current cycle. A move to more significant cuts by the U.S. central bank over the coming months could be a catalyst for the next move higher in stocks, Schwartz said. n nConsumer discretionary was up 1% and financials added 0.7%, while real estate gained 1.1% as long-term borrowing costs fell. n nThe Canadian 10-year yield touched a two-month low at 3.340%. n nReporting by Fergal Smith in Toronto and Sanchayaita Roy in Bengaluru; Editing by Shreya Biswas and David Gregorio