Daily Wrap-up: Positive session overall as oil hits 2016 high

Daily Wrap-up: Positive session overall as oil hits 2016 high

Daily Wrap-up: Positive session overall as oil hits 2016 high Positive session overall as oil hits 2016 high
Global equities were generally in positive territory Wednesday as oil prices hit their highest point for the year so far before easing. US data showed larger stockpiles but this was tempered by higher gasoline demand and lower oil output.

The main TSX index closed higher as energy and financials led the gains, helped by the Bank of Canada’s interest rate freeze and optimistic economic outlook.

Wall Street also gained with the three main indexes ending the session 1 per cent higher. Most Asian and European indexes closed higher too.
The S&P/TSX Composite Index closed up 89.93 (0.66 per cent)
The Dow Jones closed up 187.0 (1.06 per cent)
Oil is trending lower (Brent $43.98, WTI $41.51 at 4.10pm)
Gold is trending lower (1245.10 at 4.10pm)
The loonie is valued at U$0.7803
BoC sees 0.5 per cent boost from federal budget
The Bank of Canada has kept the overnight interest rate at 0.5 per cent and given its assessment of the economy in light of the recent federal budget. The central bank expects the government’s measures, including infrastructure spending, will add 0.5 per cent to Canada’s growth this year (to 1.7 per cent) and 0.6 per cent in 2017 (to 2.3 per cent). Had those measures not been taken there would have been a downgraded forecast from the January reading.

The BoC outlook highlighted continuing challenges from the oil downturn and the potential for the global economy to create further issues. Governor Stephen Poloz also noted that there is weak investment and company formation currently and highlighted a lower expectation for long-term growth.

CIBC World Markets economist Benjamin Tal told BNN that the BoC’s agenda is to lower the value of the Canadian dollar. The loonie hit a 9-month high Wednesday.
Fund manager Kevin Hall predicts 10 per cent rise for TSX
The rally in oil will continue to boost equities this year and the main index of the TSX will end the year 10 per cent higher. That’s the view of fund manager Kevin Hall, who manages the BMO Monthly High Income Fund, Canada’s top performing large equity fund. He told The Globe and Mail that any dip in oil prices would only create a further buying opportunity for the fund.