04:26 PM EDT, 10/21/2024 (MT Newswires) -- The Toronto Stock Exchange fell off a record high on Monday, dropping the first time in four sessions ahead of this week's expected cut to interest rates from the Bank of Canada and the start of the third-quarter corporate reporting season.

The S&P/TSX Composite Index close down 99.21 points to 24,723.33, down from Friday's record close of 24,822.54. The biggest decliners on the day were Base Metals, down 1.0% and Health Care, down 0.7%. Gainers on the day were Battery Metals, up 3.0%, and Energy, up 0.33%. Declining issues outpaced advancers 1,344 to 534, with 137 listings unchanged.

The drop comes ahead of this week's interest-rate decision from the Bank of Canada (BoC) with most, but not all, economists expecting a 50 basis point cut from the central bank.

"I find myself in an unusual position of advocating for a 25-basis point reduction in the Bank of Canada policy rate come Wednesday, when all bank peers have moved into the 50 basis point camp. When the Bloomberg poll was conducted in early September, not a single hand was up for 50 basis points. The dramatic shift in private sector sentiment in the past couple weeks occurred in the absence of Bank of Canada communication or signals. Wednesday will tell us how beholden the BoC is to market expectations," TD Bank chief economist Beata Caranci wrote. "Is this the Bank of Canada call the hill I want to die on? No. But a one-time, 50 basis point move in the middle of a monetary cycle warrants very clear communication on how the central bank is framing that decision."

Third-quarter corporate results and dividend announcements will also begin rolling out in earnest this week. BMO Economist Robert Kavcic said some investors have been pointing to the "value in Canadian dividend stocks, especially relative to an asset class like real estate, which had captivated hearts and minds (emphasis on had...the hard reality is hitting)."

Kavcic noted: "The advantages are many: Higher yield, better tax treatment, stronger payout growth, little payment risk if selected properly, minimal transaction cost and instant/partial liquidity. The lack of leverage is probably the biggest drawback, but that's still an extensive list of benefits (and leverage can work both ways)."

The TSX, Kavcic also noted, is now pushing record highs, led in part by a gang of dividend-paying sectors that had previously been depressed by the tightening cycle. He said this is clearly one area where quick BoC easing is helping. Meantime, investor-heavy segments of the real estate market (i.e., small Toronto condos) are swamped with supply and still seeing prices fall," he added.

West Texas Intermediate (WTI) crude oil closed higher on Monday after China lowered interest rates as the No.1 oil importer looks to stimulate its flagging economy. WTI crude for November delivery was last seen up US$1.34 to settle at US$70.56 per barrel, while December Brent crude, the global benchmark, was last seen up US$1.23 to US$74.29.

Gold traded at a fresh record high midafternoon on Monday despite a rising dollar and higher treasury yields as the metal benefits from easing interest rates and safe-haven buying amid Middle East violence and the approaching U.S. election. Gold for December delivery was last seen up US$8.10 to US$2.738.10 per ounce after closing at a record US$2,730.00 last Friday.

Wells Fargo Investment Institute (WFII) noted the Energy sector has underperformed this year, but it has bounced recently on rising geopolitical concerns.

"Looking ahead," it said, "we believe the sector will benefit from an improved macro outlook and operating efficiencies. Therefore, we recommend trimming defensive areas such as Utilities in favor of growth-oriented or cyclical sectors such as Energy."