Stocks remained choppy on Wednesday to start June on a mixed note, as the Bank of Canada raised the policy interest rate by 50 basis points — in line with Street’s expectations. The TSX Composite Index ended the dull session with a minor loss of 16 points at 20,714. While rising crude oil prices helped TSX energy stocks inch up, other key sectors, like healthcare, technology, consumer, and real estate, traded on a negative note.
Highlights from the Bank of Canada’s statement
In its latest report, the Bank of Canada pointed to inflationary concerns — mainly driven by rising energy and food prices. Canada’s central bank warned that CPI inflation “will likely move even higher in the near term before beginning to ease.” The report also highlighted how the Russia-Ukraine war, China’s new COVID restrictions, and continued supply chain issues are hampering the global economy and resulting in high inflation. Moreover, the Bank of Canada showed its willingness “to act more forcefully if needed” to fight inflation.
Top TSX movers and active stocks
Shares of Laurentian Bank of Canada (TSX:LB) popped 9% yesterday to $42.05 per share after its latest quarterly results beat analysts’ estimates. In the April quarter, the bank’s total revenue rose by 3.9% from a year ago with the help of higher interest income from commercial loans. To add optimism, its adjusted earnings for the quarter stood at $1.39 per share — up 13% year over year and significantly higher than Street’s expectation of $1.15 per share. After yesterday’s rally, Laurentian Bank stock now trades with 4.7% year-to-date gains.
Stelco Holdings, CAE, and Jamieson Wellness were also among the top TSX gainers in the last session, as they jumped by more than 6% each.
In contrast, shares of companies like Hut 8 Mining, Lithium Americas, and Lion Electric fell by at least 7.5% each, making them the worst-performing TSX Composite components for the day.
Based on their daily trade volume, Suncor Energy, Manulife Financial, Enbridge, and Cenovus Energy were the most active Canadian stocks.
TSX today: Economic events and earnings
Early Thursday morning, crude oil prices were continuing to fall for the second consecutive session, pointing to a lower opening for energy stocks today. On the flipside, metals prices — especially copper — were showcasing good strength, which should help metals and mining shares on the TSX rise at the open. Overall, I expect most Canadian sectors to remain volatile in the near term, as investors continue to analyze and react to the Bank of Canada’s latest statement.
While no key domestic economic releases are due today, Canadian investors may want to keep an eye on the latest non-farm employment, jobless claims, and crude oil stockpiles data from the U.S. market this morning. On the corporate events front, the Canadian investment firm Canaccord Genuity Group is expected to announce its March quarter results on June 2. Analysts expect the company to report $0.45 per share in earnings.
