RCMP uncovers plot to sell drones and equipment to Libya
The RCMP says it has uncovered a plot by two men in Montreal to sell Chinese drones and military equipment to Libya illegally.
Canada's main stock index ended a 14-day winning streak of daily gains as it moved off record highs ahead of Wednesday's economic update from the Bank of Canada.
The Toronto market has been supported by decent U.S. corporate earnings, but moved “sideways” Tuesday in anticipation the central bank would announce further bond tapering and update its GDP and inflation forecasts for the first time since July, said Katherine Judge, director and senior economist at CIBC Capital Markets.
The Bank of Canada has committed to leave interest rates on hold until the output gap, the difference between actual and potential goods and services produced, has been eliminated.
“They previously said economic slack would be eliminated in the second half of next year, and we're expecting a downgrade in their 2021 GDP growth forecast which could push that time frame for closing the output gap into Q4 of 2022,” she said in an interview.
In addition to lowering its economic growth forecasts, the bank is expected to raise its inflation projection.
“Markets will definitely be focused on what they're messaging around inflation and how transitory they view it.”
The S&P/TSX composite index closed down 111.39 points to 21,173.45.
U.S. stock markets rose with the Dow Jones Industrial Average and S&P 500 setting record highs on continued strong third-quarter results and consumer confidence and new home sales numbers that both beat expectations.
Those moves are “suggesting that these higher prices and inflation aren't really deterring demand in some key areas like autos, housing, et cetera,” Judge added. “Although obviously supply chain issues are still downside risks.”
In New York, the Dow was up 15.73 points at 35,756.88. The S&P 500 index was up 8.31 points at 4,574.79, while the Nasdaq composite was up 9.01 points at 15,235.71.
The TSX was driven lower by decreases in 10 of the 11 major sectors with only financials gaining.
Health care dropped 2.1 per cent as shares of cannabis producers Tilray Inc. fell 3.1 per cent.
Shopify Inc lost 4.4 per cent to help push technology down while materials dropped on concerns about weaker Chinese economic growth.
The December gold contract was down US$13.40 at US$1,793.40 an ounce and the December copper contract was down 4.2 cents at nearly US$4.49 a pound.
Consumer discretionary lost 1.4 per cent with BRP Inc. off eight per cent.
Energy slipped despite higher crude oil prices with shares of Vermilion Energy Inc. down 1.6 per cent and Whitecap Resources Inc. off 1.5 per cent.
The December crude contract was up 89 cents at US$84.65 per barrel and the December natural gas contract was down 5.3 cents at US$6.00 per mmBTU.
The Canadian dollar traded for 80.80 cents US compared with 80.78 cents US on Monday.
The loonie has gained in value due to commodity price enthusiasm but Judge said CIBC is forecasting a depreciation on a recalibrating of interest rate hike expectations.
“Lowering them for the Bank of Canada and raising them for the Fed in the post-2022 period,” she said.
“But obviously in recent months, the rise in commodity prices has largely offset the increase in Fed hawkishness to some extent.”
This report by The Canadian Press was first published Oct. 26, 2021.
The RCMP says it has uncovered a plot by two men in Montreal to sell Chinese drones and military equipment to Libya illegally.
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