Rate-Cut Delays Are a Headwind for Canadian Stocks, IG Strategist Petursson Warns
- TSX benchmark has heavy exposure to rate-sensitive financials
- US CPI lowered the odds of a Bank of Canada cut this spring
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Canada’s main equity index is poised to struggle if investors determine that central banks are going to delay rate cuts for a while, IG Wealth Management’s chief investment strategist said.
Traders have become less optimistic that policymakers will lower borrowing costs in the first half of 2024 after US inflation data was hotter than expected. That’s a potential headwind for banks, utilities and possibly other names such as Shopify Inc. that are rate-sensitive heavyweights in the S&P/TSX Composite Index, IG’s Philip Petursson said.