Canadian stocks started the new week on a bearish note after the U.S. Federal Reserve chair Jerome Powell indicated that the central bank is unlikely to cut interest rates in its next meeting. The S&P/TSX Composite Index tanked by 213 points, or 1%, on Monday to 20,872 — posting its second biggest single-day decline of 2024.
While all key market sectors ended the session in red territory, the TSX index went down sharply, mainly due to a selloff in healthcare, technology, real estate, and utility stocks.
In a recent interview with CBS News, Powell stated that although inflation has decreased, the Fed seeks more evidence of sustainable reduction towards a 2% target before considering rate cuts. Despite inflation dropping from over 9% to about 3%, Powell emphasized the importance of maintaining price stability and the balance between moving too early and too late.
Top TSX Composite movers and active stocks
Lithium Americas, Ballard Power Systems, Innergex Renewable Energy, and Lithium Americas (Argentina) were the worst-performing TSX stocks yesterday as they plunged by over 6% each.
Shares of TMX Group (TSX:X) also slipped 1%, as investors awaited its quarterly earnings report, which was released after the market closing bell. In the fourth quarter, the Canadian company’s total revenue rose around 9% year over year to $301.5 million, helping it post a record annual revenue of $1.19 billion for the full year 2023.
Despite an increase in operating expenses, higher revenues drove TMX’s adjusted quarterly earnings up by 6.3% from a year ago to $0.37 per share, in line with analysts’ expectations. After rallying by 18.2% last year, X stock has risen 4.2% in 2024 so far.
On the flip side, BRP and Nuvei climbed by at least 3.7% each, making them the session’s top performers on the Toronto Stock Exchange.
Based on their daily trade volume, Enbridge, Manulife Financial, Royal Bank of Canada, TD Bank, and Suncor Energy were the five most active stocks on the exchange.
TSX today
Most commodity prices, especially metals, have dived sharply in the last few sessions owing to weakening demand from China. Given that, I expect the resource-heavy main TSX index to remain under pressure at the open today.
Besides domestic purchasing managers index data, Canadian investors will also watch the Bank of Canada governor Tiff Macklem’s comments about the economy during his speech at the Montreal Council on Foreign Relations today.
On the corporate events front, several TSX-listed companies, including International Petroleum, FirstService, Precision Drilling, Algoma Steel, Finning International, and First Capital Real Estate Investment Trust, are expected to announce their latest quarterly results on February 6.
Market movers on the TSX today
