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Today’s headlines

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Top story

Economy poised for growth later this year, Bank of Canada to cut rates by spring: Deloitte

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The Canadian economy will return to growth in the second half of 2024, with interest rate cuts as early as this spring, Deloitte Canada says.

The firm’s economic outlook report predicts stagnant growth during the first half of the year as the effects of higher interest rates continue to work their way through the system.

The Bank of Canada held its key rate steady at five per cent in December after a heavy-handed hiking campaign to fight inflation.

Deloitte said inflation is still uncomfortably high at 3.1 per cent as of November, but it’s unlikely the central bank will hike rates further.

However, Deloitte Canada chief economist Dawn Desjardins said we shouldn’t expect interest rates to return to their pre-pandemic lows.

Desjardins said momentum in the economy and the job market is poised to improve in the second half of 2024 as confidence starts to recover.

Desjardins spoke with the Financial Post’s Larysa Harapyn in December about the firm’s economic outlook. Watch the interview and read the story here.

The Canadian Press, Financial Post

10:01 a.m.

Markets open: Wall Street mixed, TSX up

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Wall Street is drifting Thursday following signals that the United States job market remains solid, though it may be a touch too strong.

The S&P 500 was virtually unchanged in early trading and on track for its first losing week in the last 10. The Dow Jones Industrial Average was up 0.5 per cent, as of 10:10 a.m. Eastern time, while the Nasdaq composite was 0.11 per cent lower — putting the tech-heavy benchmark on track for its fifth day of declines and its longest losing streak in over a year.

Apple Inc. dipped after its second downgrade this week as Piper Sandler flagged concern about iPhone inventory levels.

The S&P/TSX composite index was up 0.22 per cent, after closing down for the first two days of the new trading year.

Stocks have broadly regressed this week after rallying powerfully into the end of last year. Critics said the market was due for at least a breather following the big run, which fed on hopes that inflation has cooled enough for the Federal Reserve to cut interest rates sharply this year.

Ten-year Treasuries extended declines with the yield rising to 3.99 per cent after data showed U.S. companies ramped up hiring in December and jobless claims came in below estimates. Swaps traders trimmed their bets on Fed easing after the data.

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“There was nothing within the data that would suggest any urgency from policymakers to begin normalizing rates lower during the first quarter,” said Ian Lyngen a strategist at BMO Capital Markets.

The Associated Press, Bloomberg

7:30 a.m.

Stock markets before the opening bell

Stocks steadied after a bruising start to the year as investors awaited fresh pointers on the timing of possible interest-rate cuts. Oil continued its surge as conflict in the Middle East added to supply concerns.

United States equity futures climbed and Europe’s Stoxx 600 added 0.4 per cent, supported by oil majors including TotalEnergies SE and BP PLC after crude jumped more than four per cent in two sessions. Bonds fell, with the 10-year Treasury yield up four basis points at 3.95 per cent.

The S&P/TSX composite index closed down 53.56 points at 20,818.58 on Wednesday.

Bloomberg

What to watch today

The S&P Global Manufacturing PMI for December will be released this morning. In the United States, expect the latest Challenger layoff report, the ADP national employment report and initial jobless claims.

Wallgreens Boots Alliance Inc. and ConAgra Foods Inc. release earnings today.

Need a refresher on yesterday’s top headlines? Get caught up here.

Additional reporting by The Canadian Press, Associated Press and Bloomberg

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