By Ketki Saxena
Investing.com -- Canada’s main index, the S&P/TSX Composite index touched a one-month high today as investor sentiment remained upbeat on both US and Canadian economic data that buoyed hopes for an end to interest rate hikes.
US Nonfarm payrolls increased by 187,000 jobs in August, compared to expectations of 170,000 additions, boosting bets that the Fed will keep rates unchanged in September. Chances of a September rate pause stood at 93%, while bets of a pause in November grew to 63% compared with just 44.5% last week.
The TSX was also boosted by Canadian GDP data that showed the domestic economy contracted in the second quarter at an annualized rate of 0.2%, with economists now betting that the Bank of Canada will keep rates on hold until it begins cutting rates next year.
The commodity-heavy TSX was also supported by gains in crude prices on expectations that OPEC+ would extend output cuts to the end of the year.
Canadian Stock Markets News
Canadian Western Bank (TSX:CWB) shares rose after reported its third-quarter profit. Common shareholders’ net income totalled $83.1 million for the quarter ended July 31, up from $70 million a year earlier. The profit equates to 86 cents per diluted share compared to 73 cents per diluted share a year earlier. Revenue totalled $283.5 million, up from $264.4 million a year earlier.
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In Canadian Economics
Canada's economy contracted in the second quarter at an annualized rate of 0.2% while growth was most likely flat in July. On a monthly basis, June gross domestic product declined 0.2% from May. The quarterly data was far lower than the Bank of Canada's (BoC's) forecast for a 1.5% annualized GDP growth as well as the 1.2% gain expected by analysts.
Meanwhile, the S&P Global (NYSE:NYSE:SPGI) Canada Manufacturing Purchasing Managers' Index (PMI) fell to a seasonally adjusted 48.0 in August from 49.6 in July, its lowest level since June 2020, The output index fell to 47.7 from 51.1 in July, while the new orders index also posted a reading of 47.7, falling from 49.2. Readings below 50 qualify as a contraction.