A man walks past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange in Hong Kong Wednesday, March 17, 2021. THE CANADIAN PRESS/AP-Vincent Yu

TSX hits 19,000 points for first time on supportive outlook from U.S. Federal Reserve

TSX hits 19,000 points for first time on supportive outlook from U.S. Federal Reserve

TORONTO — Canada’s main stock index hit 19,000 points for the first time Wednesday on a supportive outlook by the U.S. Federal Reserve.

The S&P/TSX composite index erased morning losses to close up 109.09 points to 18,983.10 after hitting an intraday record of 19,037.13.

In New York, the Dow Jones industrial average was up 189.42 points at 33,015.37 to surpass 33,000 for the first time. The S&P 500 index gained 11.41 points to a record close of 3,974.12, while the Nasdaq composite increased 53.63 points at 13,525.20.

Sentiment was buoyed by the U.S. central bank’s bullish outlook for economic growth and reduced unemployment that should keep its benchmark interest rate near zero through 2023 despite increased inflation.

The Fed significantly upgraded its forecasts for growth and inflation. It now envisions the economy expanding 6.5 per cent this year, up sharply from its previous projection in December of 4.2 per cent.

The increase is being propelled by a rise in COVID-19 vaccinations, supported by a US$1.9-trillion fiscal relief package.

Unemployment is expected to fall from the current 6.2 per cent to 4.5 per cent by year’s end and to 3.9 per cent, near a healthy level, at the end of 2022.

It raised its forecast for inflation by the end of this year to 2.4 per cent from 1.8 per cent. That level of inflation would finally surpass the Fed’s two per cent annual target after years of chronically low inflation. But the Fed foresees inflation falling back to two per cent in 2022.

The central bank also said it would continue to buy US$120 billion in bonds each month to keep longer-term borrowing costs down.

Markets responded positively to the pledge of ongoing support and upbeat assessment of the global economy, said Candice Bangsund, portfolio manager for Fiera Capital.

“This essentially has alleviated fears of a hawkish turn from the Fed which would risk derailing the economic recovery and the record-breaking equity market rally,” she said in an interview.

“So when you think about it, taken together, it’s a very lucrative environment for stocks and risk assets in general.”

The Fed’s outlook and projections are consistent with what officials have telegraphed about remaining supportive until the recovery is well underway.

When asked about timing of the next move, chairman Jerome Powell insisted it wasn’t time to discuss an exit strategy.

The Fed reinforced the rotation toward economically sensitive sectors such as energy, financials, materials and industrials over technology and telecommunications.

That benefits the TSX because of its exposure to these sectors, which resulted in it outperforming U.S. stock markets, said Bangsund.

“Very much a compelling proposition for equity investors,” she said, noting that her year-end target for the TSX has been revised upwards to 20,000.

Bond yields increased to a 13-month high of 1.689 per cent before shaving some of the gains to reach 1.65 per cent.

A steepened yield curve hurts the technology sector.

Commodity sectors rose with energy up 1.4 per cent despite a dip in crude oil prices.

Enerplus Corp. led with shares gaining 7.8 per cent followed by Vermilion Energy Inc. at 5.6 per cent.

The May crude oil contract was down 88 cents at US$63.98 per barrel and the April natural gas contract was down four cents at US$2.52 per mmBTU.

Crude prices fell on a surprising 2.4-million-barrel increase in U.S. stockpiles last week to the highest level since December.

In addition, the International Energy Agency gave a downbeat assessment of crude markets in its monthly report. It said oil markets are not on the verge of a new price supercycle with supplies remaining plentiful.

The Canadian dollar traded for 80.22 cents US compared with 80.29 cents US on Tuesday.

Materials also climbed 1.4 per cent despite lower gold prices with Torex Gold Resources Inc. up seven per cent, B2Gold Corp. up 5.1 per cent and Oceanagold Corp. 4.6 per cent higher.

The April gold contract was down US$2.10 at US$1,728.80 an ounce and the May copper contract was up four cents at US$4.11 a pound.

Technology was one of five sectors that fell on the day with shares of Lightspeed POS Inc. down three per cent but Shopify Inc. up 2.4 per cent.

Telecommunications slipped for the first time in three days as Rogers Communications Inc. lost five per cent, the first drop since announcing its blockbuster $26-billion deal to buy Shaw Communications Inc.

This report by The Canadian Press was first published March 17, 2021.


Ross Marowits, The Canadian Press


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Red Deer Rebels will have three new assistant coaches when the WHL regular season starts on Friday. Brad Flynn (left), will be on the bench alongside fellow assistant Ryan Colville (right) head coach Brent Sutter (middle). (Photo by BYRON HACKETT/Advocate Staff)
Sutter steps down as Red Deer Rebels head coach

Red Deer Rebels Owner, GM and head coach Brent Sutter has stepped… Continue reading

Premier Jason Kenney announced $200 million more money that will benefit seniors living in continuing care on Wednesday. (photography by Chris Schwarz/Government of Alberta)
Alberta’s in-school rapid screening test program expanding

Alberta’s in-school rapid screening test program will expand to as many as… Continue reading

Parents and students learned Tuesday what the coming school year will look like. It's pretty much back to business as usual, said Education Minister Adriana LaGrange. School precautions include frequent cleaning, keeping students in the same groups where possible, planning the school day to allow for physical distancing and staying home when sick. (photography by Chris Schwarz/Government of Alberta)
Alberta’s largest school board says no to United Conservative draft school curriculum

CALGARY — Alberta’s largest school board says it will not use the… Continue reading

Cowboy Kicks, originally scheduled for May 5, will now take place Sept. 18. (Contributed photo)
Westerner Park’s Cowboy Kicks fundraiser moved to Sept. 18

A major fundraiser for Westerner Park and the Canadian Pro Rodeo Sport… Continue reading

Red Deer Rebels forward Josh Tarzwell tries to tip a point shot past Lethbridge Hurricanes goalie Car Tetachuk in WHL action Friday night at the Centrium. (Photo by ROB WALLATOR/Red Deer Rebels)
Red Deer Rebels struggles continue, drop seventh straight to Hurricanes

Hurricanes score three power-play goals in 6-3 win

Red Deer-South MLA Jason Stephan is among those who have signed an open letter criticizing the government’s return to stricter health measures. (Advocate file photo).
Updated: Kenney tells UCP caucus COVID-19 dissent OK, breaking health rules means expulsion

15 MLAs released letter on Wednesday critical of new health restrictions

Owner of 4 Point Taekwondo Kevin Mejia holds a board as organizer and martial artist Kevin Olsen breaks it in Edmonton on Friday, April 9, 2021. One hundred martial artists from around the world, will be breaking a board for an event called "Break for a Breakthrough." The idea is for martial artists to unite and re-engage with the arts because they may have drifted away or lost enthusiasm as a result of the pandemic. THE CANADIAN PRESS/Jason Franson
Break for a Breakthrough: Canadian hosts international martial arts demonstration

EDMONTON — Whether he’s breaking a wooden board, a clay tile, cement… Continue reading

Queen Elizabeth and Prince Philip, Duke of Ediburgh, left, look on as Manitoba Beaver peaks out of his box at a July 14, 1970 ceremony in which Hudson's Bay Company observed an old tradition. The death of Prince Philip has reminded a small French village in Manitoban about how a royal visit half a century ago made the community the centre of frog racing in Canada. THE CANADIAN PRESS
Prince Philip’s frog-jumping legacy in a Manitoba French community

WINNIPEG — The death of Prince Philip, Duke of Edinburgh, has reminded… Continue reading

The Yukon provincial flag flies on a flag pole in Ottawa, Monday July 6, 2020. Yukon residents will head to the polls on Monday for Canada's fourth election held during the COVID-19 pandemic. THE CANADIAN PRESS/Adrian Wyld
Yukon residents set to vote in fourth election held in Canada during pandemic

WHITEHORSE — Yukon residents will head to the polls on Monday for… Continue reading

Conservative leader Erin O'Toole holds a press conference on Parliament Hill in Ottawa on Tuesday, April 6, 2020. Top Tory leaders of past and present will speak with supporters today about what a conservative economic recovery from COVID-19 could look like. THE CANADIAN PRESS/Sean Kilpatrick
O’Toole, former PM Harper speak on ‘build back right’ for pandemic recovery

OTTAWA — Top Tory leaders of the past and present will speak… Continue reading

Prime Minister Justin Trudeau holds a press conference in Ottawa Tuesday, March 9, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Liberals set to debate universal basic income, pharmacare, OAS hike

OTTAWA — Grassroots Liberals have taken up Prime Minister Justin Trudeau’s call… Continue reading

Students enter the Pierre Laporte Secondary School as secondary school students return to class full time during the COVID-19 pandemic in Montreal, Monday, March 29, 2021. Pandemic-fuelled frustration has some teens expressing anger in unhealthy ways after a year of missed social connections that would typically help them mature and regulate their emotions, says a psychiatrist calling for more education on coping skills as part of the school curriculum. THE CANADIAN PRESS/Paul Chiasson
Teach students coping skills to deal with anger, including during pandemic: doctor

Pandemic-fuelled frustration has some teens expressing anger in unhealthy ways after a… Continue reading

In this file photo, a lotto Max ticket is shown in Toronto on Monday Feb. 26, 2018. (By THE CANADIAN PRESS)
No winning ticket for Friday’s $25 million Lotto Max jackpot

TORONTO — No winning ticket was sold for the $25 million jackpot… Continue reading

jobs - T - 3-6-2020
Finding a job: 3 job search truisms you need to accept

A job search has many moving parts; your mindset is the most… Continue reading

Most Read