Canada Stocks Close Lower, Snapping Winning Run; Most Sectors Down; Moody's Lowers Debt Outlook on Largest Banks
Canadian stocks closed around a dozen points lower on Wednesday, snapping an eight session winning streak. Most sectors were lower, led down by Health Care, Telecoms and Metals and Mining, but Energy and Info Tech and Utilities bucked the trend.
In terms of guessing where the TSX goes from here, it may well depend on tomorrow's key economic data both in Canada and the United States. In Canada, we get Q1 Capacity Utilization, April New Housing Price Index and May Teranet/National Bank housing data as well as the Bank of Canada's Financial Systems Review. In the States we get May Retail Sales and Import Price Index, in addition to Claims data.
Today, although the TSX closed down 12 points at near 14,890, it was down around the 14,850 mark mid-afternoon, so there appears to be still some hunger there for Canada stocks, despite recent gains.
Of commodities, crude oil prices continued to rise, edging closer to the US$105 per barrel level on a WTI basis which in turn helped energy stocks gain traction. Gold prices also edger higher, trading close to the US$1,260 per ounce level.
Moody's Investors Service on Wednesday said it revised its outlook downward on certain debt and deposit ratings of Canada's largest banks, following the Canadian government's plans to implement a "bail-in" regime to avoid a taxpayer-funded bailout in the event of a financial crisis, Reuters reported.
The U.S.-based credit ratings agency reportedly said it revised its outlook to "negative" from "stable," on the supported senior debt and uninsured deposit ratings of the banks, which include Royal Bank of Canada (RY.TO, RY), Toronto-Dominion Bank (TD.TO, TD) and Bank of Nova Scotia (BNS.TO, BNS), as well as Bank of Montreal (BMO.TO, BMO), Canadian Imperial Bank of Commerce (CM.TO, CM) and National Bank of Canada (NA.TO).
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