TSX closes flat, markets focused on three things
The Toronto Stock Exchange saw gains for most of the major sectors Tuesday with utilities and IT leading. Energy and healthcare were the laggards.
The markets were focused on three things: The Fed, the Bank of Japan, and oil prices. The central banks are announcing interest rate decisions Wednesday and, in the case of Japan, the market is also hoping for stimulus.
Oil prices are holding steady ahead of the Fed but are still pressured from oversupply; Venezuela said Tuesday that the global glut is 10 per cent ahead of demand.
The main TSX index and Wall Street closed flat ahead of the Fed; Asian markets were mostly lower; Europe’s indexes closed flat.
The S&P/TSX Composite Index closed up 25.75 (0.18 per cent)
The Dow Jones closed up 9.79 (0.05 per cent)
Oil is trending mixed (Brent down at $45.87, WTI up at $43.85 at 4.35pm)
Gold is trending higher (1318.10 at 4.35pm)
The loonie is valued at U$0.7569
Poloz says we should adjust to low rates
Interest rates are likely to remain low for a long time the Bank of Canada governor said Tuesday.
Speaking at a meeting of economists in Quebec, Stephen Poloz said that Canadians must adjust to the new reality of low interest rates; good news for borrowers but not for those reliant on returns on savings and certain investments.
As people are living longer, the issue of low yields was directly addressed: People are “rightly worried about their ability to live off their savings,” he said. “I certainly can sympathize and understand these concerns.”
Mr Poloz also warned businesses about their expectations for returns on investments and said that those that are waiting for yields at pre-crisis levels may not invest at all, with a negative impact on the economy and labour market.
Watch your debt levels watchdog tells Canada
The increasing levels of Canadian household debt is a risk to the banking system according to the Bank for International Settlements. The global banking organization says that Canada’s credit-to-GDP ratio is among the developed world’s highest, noting in a quarterly report: “Credit growth continues to be unusually high relative to GDP in several Asian economies as well as in Canada.”