04:28 PM EDT, 09/12/2024 (MT Newswires) -- The Toronto Stock Exchange closed at a record high on Thursday, with the resource-heavy index benefiting from higher commodity prices and confidence lower interest rates are coming for the country's No.1 trading partner.

The S&P/TSX Composite Index closed up 263.97 points to end at 23,475.14, topping the prior record of 23,346.18 set on Aug.30. The biggest gainers on the day were Battery Metals and Basic Metals, up 3.5% and 3.0% respectively, followed by Utilities, up 1.8%. Health Care was the only decliner, down 0.3%.

West Texas Intermediate (WTI) crude oil for a second day on Thursday, boosted by the supply cuts caused by Hurricane Francine's path through the Gulf of Mexico, while the International Energy Agency warned demand growth continues to wane as China's economy slows. WTI crude oil for October delivery closed up $1.66 to settle at US$68.97 per barrel, while November Brent crude, the global benchmark, closed up US$1.36 to US$71.97.

Gold traded at a record high late afternoon on Thursday as the dollar weakened ahead of next week's expected Federal Reserve interest-rate cut. Gold for December delivery was last seen up US$43.30 to US$2,585.70 per ounce, above the Aug.29 record close of US$2,560.30.

In stocks, B2Gold ( BTG ) closed up $0.48, or 12.9%, to $4.20 in heavy trading after it said overnight it reached an agreement with Mali that sees expedited approvals for a for a planned expansion of its Fekola complex in the West African country.

At the moment, focus is on Air Canada ( ACDVF ) , as a pilot strike that could being next week will negatively impact economic activity, Desjardins said Thursday. It is estimated that a two-week pilot strike could result in a loss to real GDP of around $1.4 billion in September. However Bloomberg reported the airline is asking the federal government to intervene and push the airline and its pilots into arbitration.

U.S. inflation slowed last month, with Consumer Price Index released on Wednesday showing a rise of 2.5% in August, down form 2.9% in July, firming expectations for a 25 basis point (bps) cut to rates next week. CIBC Economics on Thursday updated its economic and policy forecasts, and it is now looking for both the Bank of Canada (BoC) and the Federal Reserve to "run at a faster pace" with rate cuts, while ending their respective cycles just slightly lower than previously expected.

For the BoC, CIBC Economics now sees a 25bps cut in October followed-up with two consecutive 50bps reductions in December 2024 and January 2025. Thereafter, CIBC said, the BoC no longer pauses, delivers traditional sized cuts, and finishes the cycle at 2.25%, half-a-year earlier than previously expected.

For the Fed, CIBC Economics now expects a 25bps cut next week to be followed with consecutive 50bps reductions, in November and December 2024, and a move back to 25bps until a resting spot of 3.375% is reached by Q2 2025.

BMO, while believing that the market is still cautious on growth expectations and the relative value position of Canadian equities, data "shows earnings revision trends have been clearly positive since the end of the first quarter."

"In fact," says BMO's Brian Belski, "both bottom-up S&P/TSX 2024 and 2025 EPS (earnings per share) estimates have slowly but steadily been revised higher since March 31. Additionally, the breadth of positive FY1 & FY2 EPS revisions has steadily improved since troughing in late 2023 and recently passed the key threshold with over 50% of these revisions being positive."

From BMO's perspective, while the bulk of the earnings recovery expected in 2024 has been pushed out to 2025, "this improving growth profile and increasing analyst confidence will be a key fundamental support to drive TSX valuations higher into year-end and beyond."