Megacaps pressure Wall Street, BOC lifts TSX
On Tuesday disappointing quarters reported by Alphabet and Microsoft weighed on American markets while the Bank of Canada announced a lower-than-expected interest rate hike. As a result, American indices sank while the TSX gained over 1%. The BOC increased rates by 50 basis points–instead of the expected 75–to 3.75%.
The Canadian 10-year yield dipped below 5%. The central bank also forecast weaker growth ahead, but sees inflation falling below 3% by the end of next year. South of the border, Alphabet missed its top and bottom lines while Microsoft indicated slower-than-expected growth. Both the megatechs and BOC cited the strong U.S. dollar as headwinds.
As a result, the TSX shot up immediately after that rate decision and all sectors rallied, led by consumer staples. Enbridge rose over 1% in heavy trading, Canopy popped 8.33% and Crescent Point Energy surged 1.72% after announcing a special dividend. However, Shaw soared 7.22% on signals from Ottawa that its merger with Rogers could happen after all. It didn’t hurt the TSX that WTI jumped over 3% to $88 a barrel. In contrast, big tech sank the Nasdaq by 2% while the S&P retreated by 0.74% though the Dow was flat. Microsoft sank 7.44% and Alphabet plunged 8.89%. However, AT&T rallied 2.54% and Visa jumped 4.6% on an earnings beat. The U.S. 10-year yield actually slipped to 4.017% as Bitcoin jumped 2.4% to around $20,750.
🛢 Enbridge (ENB-T) +1%
🌿 Canopy Growth Corp. (WEED-T) +8.33%
🛢 Crescent Point Energy Corp (CPG-T) +1.72%
📡 Shaw Communication (B) (SJR.B-T) +7.22%
Ⓜ Microsoft (MSFT-Q) -7.44%
🧮 Alphabet Inc. / Google (GOOG-Q) -8.89%
📱 AT&T (T-N) +2.54%
💳 Visa Inc. (V-N) +4.6%
🅱 Bitcoin (BTCUSD) (CRYPTO:BTC) +2.4%