04:34 PM EDT, 09/18/2025 (MT Newswires) -- The Toronto Stock Exchange on Thursday closed higher but continued below Monday's record close, the longest stretch without a fresh high since the third week of August, as Rosenberg Research, while writing about U.S. stocks, may have inadvertently summed up what is happening with Canadian equities too in a note entitled 'Why Has This Turned Into A "Bad News Is Good News" Market?'.

Despite lower commodity prices, the resources heavy S&P/TSX Composite Index closed up 131.87 points, or 0.45% ,to 29,453.53, with investors buoyed by the prospect of further rate cuts this year. Most sectors were higher, led by Information Technology, up near 1.7%. Both Telecoms and the Battery Metals Index were down more than 1.3%.

Of commodities, gold futures traded lower for a second day late afternoon Thursday as traders again took profits following Tuesday's record high even as the Federal Reserve cut interest rates for the first time this year and indicated more cuts are coming. Gold for December delivery was down US$39.00 to US$3,678.80 per ounce, continuing a retreat from Tuesday's record high of US$3,725.10.

Also, West Texas Intermediate crude oil fell for a second day as rising production offset supply risks as Ukraine continues to attack Russian oil infrastructure, disrupting the country's exports. WTI oil for October delivery closed down $0.48 to settle at $63.57 per barrel, while November Brent oil was last seen down $0.52 to $67.43.

Rosenberg Research Economist Mehmet Beceren noted the S&P 500 has seen its character shift in recent years as "its cyclical exposure has been declining while sensitivity to interest rates has been on the ascent". Once we accept this shift, we can better understand why the index has managed to shrug off weak economic news so easily, Beceren said.

Among key takeaways, Beceren noted equity duration is rising: with mega-cap Tech now nearly half of the S&P 500, equity market duration has stretched into the 25-30-year range, which is 30% more than its historical average. This is making stocks far more sensitive to interest rate moves, he said.

Becerent also noted profits are decoupling from the economic cycle: Mega-cap Tech profits are resilient, and their shares are being treated as safe assets, reducing the link between equity returns and the economic cycle. He said: "U.S. equities are now more vulnerable to rates, yet they are less tied to the domestic economy, and that duality will matter even more as the next rate-cutting cycle unfolds."

Sticking with the bad news and good news idea, Fitch Ratings in its latest 'Global Economic Outlook' released today raised its world growth forecasts for 2025 "moderately" since the June Global Economic Outlook (GEO) on better than expected incoming data for Q2 2025. Still, it also said there is now evidence of an underlying U.S. slowdown in 'hard' economic data, adding positive surprises on eurozone growth have partly reflected US tariff front-running. So, Fitch still expects world GDP to slow significantly this year.

Fitch's global growth forecast is now 2.4% in 2025, up 0.2 percentage points since June but a "sizeable slowdown" from 2.9% last year and below trend. China's forecast has been raised to 4.7% from 4.2%, the eurozone's to 1.1% from 0.8% and the U.S. to 1.6% from 1.5%. World growth for 2026 is 0.1pp higher at 2.3%.

Fitch noted there has been a reduction in uncertainty over U.S. tariff policy after a flurry of announcements. Its latest estimate of the average U.S. effective tariff rate (ETR) is 16%, very close to the rate assumed in June. Fitch noted Mexico at 5% and Canada at 6%, as at August 12, 2025, face lower ETRs, due to better USMCA compliance and Europe's ETR is also slightly lower, but this is offset by higher than expected rates for Asia excluding China.