Most of Canada to receive emergency alert test today
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
North American stock markets swung lower midweek after the Federal Reserve revised its inflation outlook upwards and moved forward the timing of planned interest rate hikes.
The U.S. central bank announced Wednesday that the first rate hikes would be in 2023, after signalling in March that there would be no increases until at least 2024.
A majority of bank members also said there could be at least two quarter-point increases in 2023.
Stock markets dropped after the statement was issued at 2 p.m., but the TSX bounced back before ending the day slightly below water.
The S&P/TSX composite index closed down less than a point to 20,230.96 after reaching an intraday record of 20,295.18.
The Toronto market reacted to the Fed statement but failed to be affected by an earlier Statistics Canada report that the consumer price index rose to 3.6 per cent in May, the largest yearly increase since May 2011.
In New York, the Dow Jones industrial average was down 265.66 points at 34,033.67. The S&P 500 index was down 22.89 points at 4,223.70 after posting an intraday record, while the Nasdaq composite was down 33.18 points at 14,039.68.
The U.S. Fed increased its outlook for inflation to 3.4 per cent this year, up from its prior forecast of 2.4 per cent. It expects GDP would grow seven per cent this year, up from 6.5 per cent. Unemployment would fall to 4.5 per cent in 2021, 3.8 per cent in 2022 and 3.5 per cent in 2023.
But it gave no signal about tapering its US$120 billion a month in bond purchases or that it viewed inflation as anything but temporary.
Pierre Cleroux, chief economist for the Business Development Bank of Canada, said the bank made no major changes to its outlook but markets reacted to it suggesting two rate hikes for the first time since the pandemic.
"They keep exactly the same strategy, but they are sending the signal that the U.S. economy is improving and as a result they are going to increase interest rates faster than expected," he said in an interview.
That's positive overall and a reason why Cleroux said he doesn't expect the market declines will be lasting.
"It's down now, but I think it's actually positive news and I think the next few days the market is going to be reassured by that."
The Fed statement offers a signal that the Bank of Canada will also increase rates because the economy is performing well.
However, Cleroux doesn't expect the Canadian central bank to accelerate its rate increases.
"They already announced that they will increase interest rates from summer 2022. They were actually a bit more aggressive than the Fed and that is the reason our dollar is higher, so I don't think that will change the Bank of Canada strategy."
The heavyweight financials sector climbed on news of two U.S. interest rate hikes and was the best performer on the TSX as Bank of Montreal, National Bank and Scotiabank shares rose 1.4, 1.3 and 0.9 per cent, respectively
Technology was also higher as shares of Shopify Inc. rose 3.6 per cent and offset a 7.4 per cent decline by BlackBerry Ltd.
Energy was the worst performer despite higher prices, losing 1.4 per cent as Cenovus Energy Inc. fell 2.3 per cent, MEG Energy Corp. was down two per cent and Canadian Natural Resources Ltd. was off 1.7 per cent.
The July crude oil contract was up three cents at US$72.15 per barrel and the July natural gas contract was up 1.1 cents at US$3.25 per mmBTU.
Prices continued to increase as demand moves up as U.S. restrictions are lifted while supply remains restricted.
The Canadian dollar traded for 82.03 cents US compared with 82.05 cents US on Tuesday.
Materials also dropped despite higher metals prices as Kinross Gold Corp. climbed 7.1 per cent.
The August gold contract was up US$5 at US$1,861.40 an ounce and the July copper contract was up 5.2 cents at nearly US$4.39 a pound.
This report by The Canadian Press was first published June 16, 2021.
The federal government will test its capacity to issue emergency alerts today, with the exception of Ontario, where the test will take place on May 15.
An Ontario woman said it would have been impossible to buy a house without her mother – an anecdote that animates the fact that over 17 per cent of Canadian homeowners born in the ‘90s own their property with their parents, according to a new report.
Prince Harry, the Duke of Sussex, has made headlines with his recent arrival in the U.K., this time to celebrate all things Invictus. But upon the prince landing in the U.K., we have already had confirmation that King Charles III won't have time to see his youngest son during his brief visit.
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
A long-simmering feud between hip-hop superstars Drake and Kendrick Lamar reached a boiling point in recent days as the pair traded increasingly personal insults on a succession of diss tracks. Here’s a quick overview of what’s behind the ongoing beef.
Canadian immigrants threatened by hostile regimes are urging parliamentarians to quickly pass the 'Countering Foreign Interference Act' so they can feel safe living in their adopted home.
An Ontario man found out that a line of credit he thought was insured actually isn't after his wife of 50 years died.
Spanish state prosecutors recommended Wednesday that an investigating judge shelve a probe into another alleged case of tax fraud by pop star Shakira.
With Donald Trump sitting just feet away, Stormy Daniels testified Tuesday at the former president's hush money trial about a sexual encounter the porn actor says they had in 2006 that resulted in her being paid to keep silent during the presidential race 10 years later.
An Ontario man says he paid more than $7,700 for a luxury villa he found on a popular travel website -- but the listing was fake.
Whether passionate about Poirot or hungry for Holmes, Winnipeg mystery obsessives have had a local haunt for over 30 years in which to search out their latest page-turners.
Eighty-two-year-old Susan Neufeldt and 90-year-old Ulrich Richter are no spring chickens, but their love blossomed over the weekend with their wedding at Pine View Manor just outside of Rosthern.
Alberta Ballet's double-bill production of 'Der Wolf' and 'The Rite of Spring' marks not only its final show of the season, but the last production for twin sisters Alexandra and Jennifer Gibson.
A mother goose and her goslings caused a bit of a traffic jam on a busy stretch of the Trans-Canada Highway near Vancouver Saturday.
A British Columbia mayor has been censured by city council – stripping him of his travel and lobbying budgets and removing him from city committees – for allegedly distributing a book that questions the history of Indigenous residential schools in Canada.
Three men in Quebec from the same family have fathered more than 600 children.
A group of SaskPower workers recently received special recognition at the legislature – for their efforts in repairing one of Saskatchewan's largest power plants after it was knocked offline for months following a serious flood last summer.
A police officer on Montreal's South Shore anonymously donated a kidney that wound up drastically changing the life of a schoolteacher living on dialysis.