The Toronto Stock Exchange had its worst day in more than two years on Thursday as investors faced the reality of sharply higher interest rates to bring down stubbornly high inflation.
The benchmark Canadian stock index lost 618 points to close below 19,000 for the first time since April 2021. In percentage terms, it was the worst day for Canada’s stock market in two years.
The TSX followed the lead of stock markets around the world, which fell in unison after the Federal Reserve raised its trend-setting interest rate by 75 basis points on Wednesday, it’s biggest single hike in 26 years.
The Swiss National Bank and the Bank of England followed suit on Thursday, raising their lending rates in an attempt to cool down overheated economies.
“The market is digesting what 75 points means and asking, can the Fed continue this aggressive cycle without triggering a recession?” said Brenda O’Connor-Juanas, a senior vice-president with investment banking firm UBS.
Super-sized hike expected in Canada
After hiking three times this year to raise its rate from 0.25 per cent as recently as March to 1.5 per cent now, investors are expecting the Bank of Canada will announce a super-sized rate hike of its own next month, bringing its rate to 2.25 per cent, a level not seen since before the financial crisis in 2009.
Stubborn inflation has sent a chill through stock markets recently as investors realize persistent higher prices will be a drag on profits as consumers are forced to find ways to cut back.
“We have an overheated economy and there’s only one way to cool it off, and it’s going to be painful,” O’Connor-Juanas told CBC News in an interview.
All 11 sub-indexes of the TSX were lower, from energy to banking, and from health care to technology.
NYSE trader Peter Tuchman, known for his Wall Street-themed hats, wears one in November 2020 when the Dow Jones was poised to hit 30,000 points for the first time ever. The U.S. stock index broke through that barrier again on Thursday, in the other direction. (Brendan McDermid/Reuters)
Things were even worse on Wall Street, where the Dow Jones Industrial Average lost 700 points or more than three per cent to dip below the 30,000 level for the first time since January of 2021.
“Those are psychological barriers,” said Anthony Scilipoti, CEO of Toronto-based Veritas Investment Research. “The problem with selling is that it begets selling.”
The broader S&P 500 had its worst day since September 2020, losing 123 points or more than three per cent.
Both the S&P and the technology-focused Nasdaq have both officially entered into bear markets, which means they have declined by 20 per cent or more from the peak.
Toronto-Dominion Bank has named new co-heads of its U.S. commercial banking business.
TD says Andy Bregenzer and Jill Gateman will jointly lead the operations.
The bank says the appointments follow the announcement earlier this year of Chris Giamo’s retirement.
Bregenzer will focus on leading all aspects of the regional commercial bank, including small business.
Gateman will lead TD’s national commercial banking effort in the U.S., including middle market, sponsor-backed finance and TD’s other specialty lending lines of business.
TD, which is working to resolve investigations into failures in its anti-money laundering program in the U.S., announced last week that chief executive Bharat Masrani would retire next year and be replaced by Raymond Chun.
This report by The Canadian Press was first published Sept. 26, 2024.
MONTREAL – Lightspeed Commerce Inc. says it is conducting a review of its business and operations including talks relating to a range of potential strategic alternatives.
The Montreal-based payments technology company made the comments after reports concerning a potential transaction involving the company.
Lightspeed says it periodically undertakes a review of its business and operations with a view of realizing its full potential.
A strategic review is often seen by investors as a prelude to a sale by a company.
Lightspeed says its board of directors is committed to acting in the best interests of the company and its stakeholders.
Company founder Dax Dasilva returned to the role of chief executive officer earlier this year and has been working to return the company to profitability.
This report by The Canadian Press was first published Sept. 26, 2024.
MONTREAL – National Bank of Canada says it has cleared a key regulatory hurdle in its proposed acquisition of Canadian Western Bank.
The Montreal-based bank says it has received the Competition Bureau’s clearance for the deal.
The transaction still requires approval by the Office of the Superintendent of Financial Institutions and the minister of finance.
Canadian Western shareholders voted to approve the deal earlier this month.
National Bank announced an all-stock deal to buy Canadian Western earlier this year in a proposal that valued the Edmonton-based bank at about $5 billion.
It has said its acquisition of Canadian Western will significantly expand its western footprint and create a stronger national competitor.
This report by The Canadian Press was first published Sept. 26, 2024.
