Canada Stocks: TSX hits record high as Fed rate-cut hopes remain firm

Aritzia

12/07/2024 16:23

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      TSX hits another record high, last up 0.7%
    

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      Communications services stocks lead gains
    

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      U.S. producer price slightly higher than expected 
    

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      Aritzia's Q1 earnings beat expectations, shares rise
    

  
 (Updated at 10:31 a.m. ET/ 1431 GMT)
    By Nikhil Sharma
       July 12 (Reuters) - 
    Canada's main stock index hit a record high on Friday,
mirroring upbeat sentiment on Wall Street as investor bets on
U.S. rate cuts remained firm despite slightly
hotter-than-expected producer price numbers. 
    At 10:31 a.m. ET (1431 GMT), the S&P/TSX composite index
 .GSPTSE  was up 149.78 points, or 0.66%, at 22,693.91, set for
its third weekly gain. 
    The U.S. producer price index (PPI) showed a rise of 0.2% in
June, a day after softer consumer prices reading supported a
downward trend of inflation in the world's largest economy.
    Despite a moderate rise in the PPI dataset, markets still
maintained a 96.2% chance of a rate cut by the U.S. central bank
in September.  0#FEDWATCH 
    "Although today's data may go against those hoping for a
September cut, when you look back from the trees, what we're
finding is the US economy is slowing," said Macan Nia, co-chief
investment strategist at Manulife Investment Management.
    "We believe that will provide the Fed ammunition to begin
cutting rates in September."
    On Wall Street, indexes ticked higher on Friday after mixed
results from major banks on the first day of the earnings
season.  .N 
    On the Toronto Stock Exchange, capped communication services
stocks  .GSPTTTS  led the sectoral gains with a 1.1% rise.
Cogeco Communications  CCA.TO  gained 5.9% after its
third-quarter revenue beat analysts' estimates, boosting the
sector.       
    For the week, real estate stocks  .GSPTTRE  were set to
outperform their peers, while energy stocks  .SPTTEN  were
poised to lag. 
    Canadian inflation data due next week will have investors
adjust their rate-cut bets ahead of the Bank of Canada's next
monetary policy meeting on July 24.    
    Among individual stocks, Aritzia  ATZ.TO  topped the TSX
index with a 11.3% rise, after its first-quarter earnings beat
analysts' estimates. 
    The Canadian fashion retailer boosted the consumer
discretionary  .GSPTTCD  sector 1% higher. 

 (Reporting by Nikhil Sharma in Bengaluru; Editing by Shreya
Biswas)
 ((Nikhil.Sharma@thomsonreuters.com;))