Financial Insights That Matter
By Fergal Smith
(Reuters) -Canada’s main stock index posted its biggest decline in over three weeks on Friday as rising prospects that the Federal Reserve would pause its interest-rate cutting cycle encouraged investors to take some profits after strong gains for the market in 2024.
The Toronto Stock Exchange’s S&P/TSX composite index ended down 305.63 points, or 1.2%, at 24,767.73, its lowest closing level since the start of the year and the biggest decline since Dec. 18.
The index notched a gain of nearly 18% in 2024 but has pulled back from a December peak.
“We would view this as counter-trend in nature rather than an end of the bull market,” said Joseph Abramson, co-chief investment officer at Northland Wealth Management.
“As bond yields have been increasing, stocks have been having a pullback. But very importantly, the rise in bond yields is reflective of improving growth.”
Stocks on Wall Street also sank as the yield on the U.S. 10-year note, a benchmark for borrowing costs globally, touched its highest level since November 2023 at 4.790%.
U.S. job growth unexpectedly accelerated in December, reinforcing expectations the Fed would keep interest rates unchanged this month.
Canada’s employment report was also stronger than expected, with the economy adding 90,900 jobs in December. Still, investors continued to lean toward further easing by the Bank of Canada on Jan. 29.
Both the real estate sector and heavily weighted financials tumbled 1.8% and technology was down 1.4%.
Energy was a bright spot, adding 1.1%, as the price of oil settled 3.6% higher at $76.57 a barrel. The Biden administration imposed fresh sanctions targeting Russian oil and gas revenue.
Consumer discretionary was the only other sector to end higher, as shares of Aritzia Inc jumped 19.1% after the clothing retailer beat estimates with its quarterly results.
(Reporting by Fergal Smith in Toronto and Nikhil Sharma in Bengaluru; Editing by Vijay Kishore and Rod Nickel)
#1a73e8;">Boost Your Financial Knowledge and Achieve Stability
Discover a growing online community dedicated to delivering financial news, tips, and strategies designed to help you manage money effectively, save smarter, and grow your investments with confidence.
#1a73e8;">Top Financial Tips for Saving and Investing
- Personal Finance Management: Master the art of budgeting, expense tracking, and building a strong financial foundation.
- Investment Opportunities: Stay updated on market trends, learn about stocks, and explore secure ways to grow your wealth.
- Expert Money-Saving Advice: Access proven techniques to reduce expenses and maximize your financial potential.