The Canadian stock market remained highly volatile on Wednesday after the U.S. Federal Reserve announced its decision to hold key interest rates unchanged at 5.25% to 5.5% for the seventh consecutive time, citing solid economic activity, strong job gains, and low unemployment. After surging by as much as 240 points in intraday trading, the S&P/TSX Composite Index settled with a minor increase of 74 points, or 0.3%, yesterday at 21,962.
Despite strong gains in sectors like healthcare, technology, and real estate, declines in utility and consumer cyclical stocks restricted the TSX benchmark’s upward movement.
The Fed’s June economic projections indicated that PCE (personal consumption expenditure) inflation is expected to be 2.6% in 2024, decreasing to 2.3% in 2025. The federal funds rate, according to the latest projections, is projected to be 5.1% in 2024, dropping to 4.1% in 2025. Based on these projections, expecting more than one rate cut this year might not be realistic.
Top TSX Composite movers and active stocks
Canadian Western Bank (TSX: CWB) stock rocketed by 68.3% to $41.89 per share, making it the top-performing TSX stock for the day. This outstanding rally was due to the recent announcement of its home market rival, National Bank’s acquisition of CWB.
Under this deal, National Bank would acquire all issued and outstanding CWB shares, valuing the deal at approximately $5.0 billion. This planned transaction offers a 110% premium to CWB’s previous closing price, which justifies the 68% surge in CWB stock as investors anticipated significant immediate gains. In contrast, National Bank stock slipped by nearly 6% yesterday, trimming its year-to-date gains to 8.4%.
Laurentian Bank of Canada and Alimentation Couche-Tard were also among the session’s top performers on the Toronto Stock Exchange, rising by at least 3.9% each.
In contrast, Dollarama (TSX: DOL) dived by 4.1% to $120.54 per share after announcing its April quarter results. While the Canadian value retailer’s adjusted earnings jumped 22.2% year over year during the quarter, its revenue figure of around $1.4 billion missed Street analysts’ expectations by a narrow margin. Despite recent declines, however, DOL stock is still up around 26% on a year-to-date basis.
Based on their daily trade volume, Canadian Natural Resources, Cenovus Energy, Suncor Energy, Baytex Energy, and Telus were the five most active stocks on the exchange.
TSX today
Most commodity prices, especially metals, were bearish early Thursday morning, which could pressure TSX mining stocks at the open today.
While no major domestic economic releases are due, Canadian investors may want to keep a close eye on the latest monthly wholesale inflation report and weekly jobless claims data from the United States this morning. Overall, stocks may remain volatile in the near term as investors continue to speculate about the timing of the Fed’s upcoming rate cut.
Market movers on the TSX today
