By Ketki Saxena
Investing.com -- The TSX traded flat this morning, while Wall Street traded mixed, with recession worries continuing to mount following warnings from top executives at major banks including Goldman Sachs (NYSE:GS), JP Morgan, and Bank of America (NYSE:BAC).
Worries of a recession also pressured crude prices, further weighing on the commodity-heavy Canadian index. The TSX and Canadian investor sentiment received some support from the Bank of Canada’s monetary policy announcement. Despite a larger-than-expected 50 bp move, BoC Governor Tiff Macklem indicated a pause in rate hikes soon amidst clear signs of economic slowdown.
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Canada’s biggest banks saw the value of mortgages in the domestic businesses fall as interest rate hikes cool demand. Values of mortgages at Canada’s big six banks totalled $1.36 trillion in Q4 2022, up 1.6% quarter over quarter, and the slowest quarterly growth since the short but sharp contraction in homebuying immediately in the onset of the pandemic.
Dollarama hiked its full-year forecast, now expecting store sales growth between 9.5% and 10.5% for fiscal 2023, up from the previous 6.5% -7.5 per%. Dollarama expects sales to grow as Canadian consumers contend with high inflation and rising interest payments, incentivizing them to seek out cheaper options as they cut back on discretionary spending.
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In Canadian Economics
The Bank of Canada raised its benchmark overnight lending rate by 50 basis points to 4.25%, a larger move than had been priced in by markets, but in line with expectations from several economists. Rates are now the highest they have been since the beginning of 2008.