TSX ends higher, Oil reverses
Energy stocks in Canada and around the world advanced Wednesday as oil prices headed higher. With Brent above $50 and WTI not far behind the equity markets gained but prices have started to decline since.
Earlier in the day Asian markets ended higher despite Japan’s central bank deciding to hold its policy and not announce further stimulus following a two-day meeting.
European indexes closed essentially flat but autos and mining saw stronger gains that other sectors.
Wall Street ended higher but markets will be cautiously awaiting Fed meeting minutes during Thursday’s session.
The S&P/TSX Composite Index closed up 221.1 (1.62 per cent)
The Dow Jones closed up 122.1 (0.73 per cent)
Oil is trending lower (Brent $51.59, WTI $48.10 at 4.35pm)
Gold is trending lower (1145.30 at 4.35pm)
The loonie is valued at U$0.7653
Good news, bad news for energy sector
There was some positive news from one of Canada’s largest energy sector companies Wednesday but there was also a negative outlook for the industry. Enbridge announced that it is planning to make investments of $38 billion over the next four years largely in pipeline extensions and power generation. However the bonds market seems to have decided that energy firms will have their credit ratings downgraded by Moody’s and Standard & Poor’s. The Financial Post reports that 80 per cent of energy firms’ bonds are trading at levels that suggest a downgrade.
Retirement funds set to disappoint says report
Canada’s retirement funds and pension plans will deliver lower yields than investors had hoped according to a new report from JD Howe. The study says that returns for risk-free investments will be 1 per cent with bonds and equities using that as an anchor. The projections show that funds will be worth less than before the financial crisis and even less than in the nineties. The outlook for returns on a balanced diversified portfolio could be in the 4-6 per cent range the report says.