04:37 PM EDT, 08/15/2024 (MT Newswires) -- The Toronto Stock Exchange pushed its winning streak to a sixth day on Thursday as investors look ready to retest the July 31 record close of 23,110.81 on optimism over the health of the country's largest trading partner with the Federal Reserve seen ready to begin cutting interest rates next month.

The S&P/TSX Composite Index closed up 272.71 points to close the day at 23,032.72, rising 1,151 points since the streak began on Aug.8. The biggest gainers for the session were Base Metals, 3.9%, and Information Technology, which gained 2.6%. The only decliner was Telecoms, which slipped just 0.05%.

Buoyed by elevated commodity prices, lower than expected U.S. inflation reported a day earlier and Thursday data showing an unexpectedly robust 1.0% rise in July U.S. retail sales, the TSX joined U.S. and European exchanges in pushing higher, with all major international indices posting gains on the day.

"Well, that was certainly one ripping July retail sales report," Rosenberg Research wrote, though noting the retail data showed the U.S. economy strong enough to likely rule out a 50-basis point cut to interest rates at the September meeting of the Federal Reserve's policy committee.

Rosenberg sales noted the headline U.S. July retail sales soared 1.0% from June, well ahead of the 0.4% consensus and the month-prior drop of 0.2%.

Initial jobless claims were also released Thursday and showed a rise of 227,000, up from 233,000 a week ago and under the consensus estimate for 234,000 claims.

"This," Rosenberg said, "has reinforced the consensus view that the economy is far from falling off a cliff In fact, one can reasonably now expect the Atlanta Fed nowcast model to move even higher than its latest +2.9% annualized real GDP growth estimate for the current quarter."

For its part, Desjardins said in a note it still believes that a recession can be avoided in the States.

"It's important to keep in mind that second-quarter GDP growth once again surprised to the upside in both the U.S. and the eurozone," it noted.

To Desjardins view, fears about the U.S. economy are not entirely justified. It expects a 25 basis-point reduction in September, with subsequent cuts to follow.

On Canada, Desjardins said further rate reductions "now seem more certain." It noted that after reviewing the latest economic data, the Bank of Canada moved forward with a second consecutive rate cut in July, trimming it to 4.5%. And Desjardins said while the accompanying press release didn't explicitly signal further cuts, it added the reading it provides of the Canadian economy makes things "crystal clear."

The BoC could also be influenced by the change in U.S. data, which opens the door to additional back-to-back policy rate cuts in the coming months, Desjardins added.

Desjardins expects the BoC to have slashed its policy rate to 3.75% by the end of 2024 and 2.5% by the end of 2025. This, it said, means that variable interest rates should keep coming down over the coming months, moving in lockstep with the policy rate.

"Fixed interest rates have been lower than variable rates for the past several months, and they will likely continue to edge lower by following roughly the same trajectory as bond yields. Fixed rates could therefore remain lower than variable rates for several more months. Even though we expect the policy rate to shed more than 200 basis points by 2025, interest rates for 5-year fixed-term loans could fall less than 100 basis points due to more modest movements in the bond market."

West Texas Intermediate (WTI) crude oil closed higher on Thursday, rebounding from day-prior losses that followed a report showing U.S. oil inventories rose last week, as expectations the Federal Reserve will be ready to cut interest rates next month firm while Middle East tensions continue. WTI crude oil for September delivery closed up US$1.18 to settle at US$78.16 per barrel, while October Brent crude, the global benchmark, closed up US$1.28 to US$81.04.

Gold traded higher late afternoon on Thursday even as the dollar and treasury yields surged following the U.S. retail sales data. Gold for December delivery was last seen up US$13.40 to US$2,493.10 per ounce.