04:32 PM EDT, 08/13/2025 (MT Newswires) -- The Toronto Stock Exchange made rose to a second-straight record close Wednesday as BMO said Canadian equities "remain well positioned to keep pace with the U.S." and Desjardins noted the Bank of Canada left the door open for a rate cut next month to stimulate the economy.

Despite mixed commodity prices, the S&P/TSX Composite Index gained 72.17 points to 27,993.43, beating Tuesday's previous record finish by 70 points. Most sectors were higher, with Telecoms up 1.65% and Base Metals up near 1.3%. Health Care was down 0.8%, after strong gains in recent days, while Information Technology was down 1%.

Among individual stocks, Gildan Activewear ( GIL ) closed up $7.97, or 12%, to $75.62, after sealing a deal to acquire rival HanesBrands in a US$2.2 billion transaction.

Big picture, Brian Belski, Chief Investment Strategist at BMO Capital Markets, published his latest Canadian Strategy Snapshot entitled 'Earnings Normalization Remains on Track'.

Bottom line for Belski, despite persistent trade rhetoric, BMO "remains steadfast" that Canada is "well positioned fundamentally". He said investors should remain focused on the broader fundamental normalization process that is well under way in BMO's view. In fact, Belski added, the Canadian earnings recovery that BMO has been highlighting since the middle of 2024 continues to trend toward a more normalized growth profile.

"Furthermore," Belski said, "after a very short-lived trade induced negative revision cycle at the beginning of the year, revisions have now clearly shifted positive with S&P/TSX FY1 and FY2 bottom-up EPS estimates up almost 2% since bottoming at the end of June. More importantly, profitability metrics have stabilized over the last few quarters and growth expectations have now accelerated back toward more normalized high single digits and is likely to reach the double digit range by the end of the year. Yes, from our perspective the normalization process remains firmly on track and Canadian equities remain well positioned to keep pace with the U.S."

In economics, Desjardins noted the Bank of Canada published its 'Summary of Deliberations', an account on the deliberations of the BoC's Governing Council leading to the monetary policy decision on July 30, 2025, when it left rates unchanged.

Desjardins Macro Strategist Tiago Figueiredo noted central bankers were dissuaded from delivering a 25 basis point cut in July, but he said the door "remains open" to resume easing later this year. He added: "The resilience in economic activity and firmness in inflation both kept policymakers sidelined last month. While economic activity slowed in Q2, at least part of that slump was tied to a pull-forward in activity earlier this year. Consumption appeared to have increased in Q2, and most of the weakness in the labour market was concentrated in the sectors most reliant on trade. On inflation, policymakers remained concerned that underlying inflation had risen and risks were still skewed higher thanks to potential trade disruptions and tariffs."

But, Figueiredo also noted, policymakers took some comfort in the fact that all three of their tariff scenarios kept headline inflation below 2.5%. "Furthermore," he said, "central bankers noted that there were no signs that inflation expectations had become de-anchored."

Figueiredo noted there remained a diversity of views among Governing Council members. Some policymakers believed that the "bank may have already provided sufficient support to aid in this transition." These members cited "lagged effects of monetary policy", emphasizing the "risk that further easing might take effect only as demand was recovering, which could add to price pressures". Conversely, others noted that "further monetary policy support would likely be needed given the estimated amount and persistence of slack in the economy". Despite the diverging views, policymakers were aligned in reiterating that there may be a need for further easing "if a weakening economy put further downward pressure on inflation and the upward price pressures from the trade disruptions were contained".

As a result, Figueiredo said, the latest iteration of the 'Summary of Deliberations' suggests we could see the BoC resume its easing cycle next month. Desjardins continues to expect the BoC will cut its policy rate by 25 basis points in September.

Of commodities, gold futures edged higher late afternoon on Wednesday as the dollar and yields fell, but the metal remains rangebound since touching a record high last month. Gold for December delivery was last seen up $8.40 to US$3,407.40 per ounce, sticking under the July 22 record high of US$3,501.80.

But West Texas Intermediate crude oil closed at a 10-week low as another major forecasting agency warned global inventories are on the rise amid higher supply while a report showed an unexpected hike in U.S. inventories last week. WTI crude closed down $0.52 to US$62.55 per barrel, the lowest since June 2, while October Brent oil was last seen down $0.49 to US$65.63.