TSX Hits New Record High As Stocks Rally On Fed Rate Cut Hopes

(RTTNews) - The Canadian market is up firmly in positive territory a little past noon on Friday, with stocks from across several sectors moving higher on strong buying support amid rising hopes of an interest rate cut by the Federal Reserve in September.

Technology, energy, real estate, industrials, materials and consumer discretionary stocks are up with impressive gains.

The benchmark S&P/TSX Composite Index was up 297.80 points or 1.06% at 28,353.23 a little while ago. The index hit a new record high of 28,394.57 earlier in the session.

TFI International is rising nearly 6.5% and Teck Resources is up 6%. Baytex Energy, NexGen Energy, Pason Systems, BRP Inc., Centerra Gold, Methanex, Precision Drilling, Western Forest Products, Richelieu Hardware, Ivanhoe Mines, Matrr Corp and West Fraser Timber are gaining 4 to 5.6%.

Shopify, Cameco, Canada Goose Holdings, Magna International, HudBay Minerals, Aritzia, Celestica, Interfor Corp., Vermilion Energy and Canadian Energy Services are also among the major gainers.

Cenovus Energy is gaining about 4.3%. Cenovus announced today that it has agreed to acquire MEG Energy Corp. (MEG) in a cash and stock deal valued at $7.9 billion. As per the deal, Cenovus will acquire MEG for $27.25 per share, to be paid 75% in cash and 25% in Cenovus shares.

Cenovus expects the deal to bring in more than $400 million of annual synergies from 2028 onwards, with $150 million to realize in the near-term. Shares of MEG Corp are up by about 0.3%.

During his highly-anticipated speech before the Jackson Hole Economic Symposium, Fed Chair Jerome Powell touched only briefly on the outlook for monetary policy. However, his remarks have increased investor confidence that the Fed will lower interest rates next month.

He noted interest rates are a full percentage point lower than a year ago and said the "stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance."

The Fed Chief reiterated that monetary policy is not on a "preset course" and stressed that future interest rate decisions would be "based solely on [officials'] assessment of the data and its implications for the economic outlook and the balance of risks."

Following Powell's remarks, CME Group's FedWatch Tool is currently indicating an 89.2% chance the Fed will lower rates by a quarter point next month, up from 75% on Thursday.

Datat from Statistics Canada showed retail sales in Canada are expected to have slumped by 0.8% from the previous month in July, according to a preliminary estimate. In July, retail sales jumped by 1.5% to C$70.2 billion, the sharpest increase so far this year, and revised marginally lower than the preliminary estimate of a 1.6% jump. Retail Sales in Canada advanced by 6.6% year-on-year in June.

Core retail sales jumped by 1.9% in June, the data showed.