S&P/TSX Composite index posts record highs, BOC delivers jumbo cut
Oct 24, 2024 | Featured, Business
Source: finance.yahoo.com
Last week, the Toronto Stock Exchange’s S&P/TSX composite index set new closing records in three of the four trading sessions. This Monday, October 21, the index posted the all-time high of almost 24,923 points. This year to date, the index has jumped by more than 17%.
This latest outburst of the growth has been due to the materials sector rally boosted by the increase in the price of gold. The price of gold has been climbing since early 2024, breaking multiple records and reaching new highs. As of October 23, gold is up 33.3% since the beginning of the year to over USD 2,700 per troy ounce.
Meanwhile, the Bank of Canada (BOC) delivered a supersized interest rate cut this Wednesday in response to the recent decline in inflation, bringing its key policy rate down by half a percentage point to 3.75 per cent, down from the recent height of five per cent. This “jumbo” rate cut has been priced in the Canadian stock market and helped the recent growth of the market.
With annual inflation below BOC’s target of two per cent, 1.6 per cent in September, the central bank says its job now is to maintain the inflation target. “We took a bigger step today because inflation is now back to the two per cent target and we want to keep it close to the target,” Governor Macklem said in his opening statement.
Many experts now forecast that BOC will continue cutting rates, with another cut expected in December. This should be a positive factor for Canadian stocks going forward.
Michael Zienchuk, MBA, CIM
Investment Advisor, Credential Securities Inc.
Manager, Wealth Strategies Group
Ukrainian Credit Union
416-763-5575 x204
[email protected]
www.ukrainiancu.com
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