Canada's main stock market, the Toronto Stock Exchange, overcame a shaky start, but after steadying around midday it then made steady progress over the afternoon before closing out 39 points higher, adding to the total 250 points gained in the prior two sessions and pushing the overall index to above the 17,300 level. This reflects positive investor sentiment around the prospect of a vaccine soon, that may ensure economies really start to recover from the pandemic. It also reflects a positive reaction to the leadership team being put together by President Elect Biden in the United States, which is Canada's largest trading partner.
All told, the TSX is up more than 10% in the month of November; up by more than 200 points for the year to date; up by more than 50% from March lows; and nearish to 4% off record highs set in early 2020. Meanwhile, Action Economics noted GoCs richened amid the modest risk off flows. And crude oil firmed, pushing USD-CAD to just under 1.3000 from 1.3026 overnight.
Among heavyweight TSX sectors, Energy was up near 0.1%. But Industrials was down by as much, and Financials fell 0.5%
Speaking of sectors, Moody's Investors Service said in a new report released Wednesday that resurgent coronavirus infections that slow an economic recovery would strain non-financial corporates still reeling from the sharp downturn in early 2020. The agency noted exposure to another contraction remains concentrated in high-risk sectors, though some are performing better than Moody's initially expected. Consumer-sensitive sectors, including Hotels, Gaming & Leisure, and Retail, have been hardest hit by pandemic-related business disruptions and would be the most vulnerable to renewed economic stress.
A hypothetical global downside scenario exercise reveals similar corporate sector exposures compared to our initial analysis in early 2020," said Moody's Vice President Benjamin Nelson. "Regional differentiation would be significant, and far more companies have negative outlooks today compared to before the global outbreaks of Coronavirus."
Of commodities, gold edged higher as investors moved to shed risk ahead of the U.S. Thanksgiving holiday and the dollar weakened. Gold for February delivery closed up $0.30 to US$1,811.20 per ounce in Comex trade.
Meanwhile, West Texas Intermediate (WTI) crude oil ended at a fresh eight-month high on Wednesday, climbing for the fifth-straight session on expectations that vaccines will end the pandemic and boost demand while a report showed inventories are falling. WTI crude for January delivery closed up $0.80 to US$45.71 per barrel, Marketwatch reported, the highest since early March. January Brent crude, the global benchmark, was last seen up $0.58 to US$48.44 while Western Canada Select was up $1.58 to US$34.84 per barrel.