BOC cuts rates as U.S. markets bounce back on Biden win
Following their American peers, the Bank of Canada on Wednesday cut the benchmark interest rate by 50 basis points to 1.25%. Both central banks are responding to the negative impact of the coronavirus on their economies and world growth. The TSX gained 2.17% in spirited trading. Tech soared, with Shopify rising 7.7% and its unofficial junior, Lightspeed POS nipping at its heels at 7.5%. Real estate, telcos, industrials and staples also enjoyed a strong session.
Meanwhile in the States, Democrat hopeful Joe Biden shone in Super Tuesday’s voting in a surprisingly strong showing. The Dow rallied 4.5% and the S&P rose 4.2% as investors were relieved that the moderate, market-friendly Biden outshone the leftist favourite, Bernie Sanders. In fact, Biden may be gaining momentum on frontrunner Sanders.
It’s the second time in three days that the Dow has swung over 1,000 points. Healthcare shareholders were particularly relieved, with the S&P healthcare sector popping 5.8% and UnitedHealth rocketing 10.7%. Another big gainer was Visa, up 4.61% while chipmakers rallied. AMD spiked 7.19%. While the markets were hopeful on Wednesday, the coronavirus continued to spread outside China (where new cases have been declining), including the U.S, and Japan. American futures fell Wednesday evening.