TSX Futures Rise in Wake of Biden’s Election Exit
On Monday, futures associated with Canada’s primary stock index, the S&P/TSX 60, experienced an upward movement, influenced positively by an increase in gold prices. This trend emerged following the announcement from U.S. President Joe Biden that he will not be seeking re-election in the upcoming 2024 presidential race.
As the markets opened, the S&P/TSX 60 futures showed a promising uptick of 0.60% at 07:02 a.m. ET. This rally in the Canadian markets was mirrored by a similar positive sentiment on Wall Street, as investors began recalibrating their expectations and assessing the potential for a Republican victory, notably that of Donald Trump, in the forthcoming elections.
The decision by President Biden to step down from the race and throw his support behind Vice President Kamala Harris for the Democratic candidacy has introduced a new layer of political uncertainty. This uncertainty is expected to have varying implications for the global economy, especially the world’s largest economy, the United States.
[INSERTIMAGE]
This political shift comes at a time when investors are pivoting away from the highly valued technology giants in the U.S., a move that is also resonating within Canadian markets. Particularly impacted are sectors reliant on technology, amid broader concerns about valuation and future growth prospects.
On the sectoral front, the materials sector is anticipated to attract considerable attention in light of the ascent in gold prices. Conversely, copper prices have dipped to a more than three-month low, primarily driven by escalating demand concerns within China, the world’s largest consumer of the metal.
However, not all news on the commodity front is positive. The energy sector in Canada is poised for a challenging session due to falling oil prices, reflecting broader concerns over global demand and market dynamics.
Market watchers are now keenly awaiting the Bank of Canada’s upcoming monetary policy announcement. Scheduled for Wednesday, the consensus is leaning towards an expectation of a cut in borrowing costs by the central bank, motivated by a recent slew of favorable economic data coming out of Canada. Notably, the latest reports on annual inflation for June and retail sales have bolstered the case for a rate cut, with market odds currently standing at 92.1% in favor of such a move this week.
In corporate developments, Air Canada has made headlines by revising its full-year core profit forecast downwards. The airline cited over-capacity issues in certain markets as a significant factor affecting its pricing strategy and financial health.
As the political and economic landscapes continue to evolve, both in Canada and across the global stage, investors and market participants will closely monitor these developments to gauge their potential impact on the markets. With a notable shift in the U.S. political arena and critical economic decisions on the horizon, the coming days promise to be of considerable interest to those engaged in the financial markets.
