A late day slump pushed Canada's main stock market into negative territory as losses in the energy sector weighed. The S&P/TSX Composite Index ended the Wednesday trading session down 5 points to 15,910, well off its highs of the day (15,992).
Industrials, financials (+0.2%) and tech were all in the green, offset by losses in the materials, healthcare and energy (-2.2%) sectors as oil prices fell nearly 3%.
In stock news, Hudson's Bay (HBC.TO) shares fell 12% after posting a wider-than-forecast loss on weaker sales. Laurentian Bank (LB.TO) was down 1.4% (following an 8% drop on Tuesday) as investors fretted about documentation issues and client misrepresentations found with some of its mortgage portfolios. The bank's CEO said today the problem is not material to investors. Dollarama (DOL.TO) fell 2% despite beating analysts' expectations as higher sales helped boost third quarter profits. Heavily traded Aurora Cannabis (ACB.TO) lost 4%. CN Rail (CNR.TO), one of the day's most influential shares, gained 1.4%.
In economic news, the Bank of Canada held interest rates at 1.00%, matching widespread expectations. They said they will continue to be cautious in terms of further rate increases ("higher interest rates will likely be required over time"), taking guidance from the economic data. The announcement was consistent with the cautious tone that they have shown in recent months. Canada's recent data is in line with the BoC's outlook for growth to moderate in H2 but remain above potential. Inflation has been slightly higher than expected and will continue to be boosted by short-term factors. Analyst David Rosenberg told BNN-TV he doesn't expect the Bank to raise rates at all next year, even though there's a 70% chance of an increase in Q1 2018. Meanwhile, Canadian labour productivity fell 0.6% in Q3 after a revised 0.2% dip in Q2. The decline in Q3 was marginally more pronounced than expected (median -0.5%). GDP grew 0.3% in Q3 after the 1.2% rise in Q2 while hours worked expanded 0.9% after a 1.3% jump. Unit labour costs surged 1.2% in Q3 after falling 0.7% in Q2 and slipping 0.2% in Q1. The bounce in unit labour costs during Q3 was the largest increase since Q1 of 2015's 1.6% gain, and tracks the pick-up evident in the labour force survey's average weekly earnings measure. The acceleration in compensation costs growth during Q3 and into early Q4 suggests labour market slack is rapidly being absorbed by a production side of the economy that is in full use of its resources.
The Canadian dollar fell more than half a cent to 78.18 US.