04:28 PM EDT, 10/16/2024 (MT Newswires) -- The Toronto Stock Exchange rose to a fresh record high on Wednesday, pushed up on rising expectations for an outsized cut to interest rates next week by the Bank of Canada.

The S&P Composite Index closed up 122.12 points to 24,561.2, topping the prior record of 24,471.17 set on Oct.11. The biggest gainers were Utilities, up 2.1%, and Base Metals, up 1.2%, while Battery Metals, down 3.5%, was the biggest decliner.

West Texas Intermediate (WTI) crude oil closed with a small loss on Wednesday, following day-prior losses of more than 4%, on easing geopolitical worries and weakening Chinese demand. WTI crude for November delivery closed down US$0.19 to settle at US$70.39 per barrel, while December Brent crude, the global benchmark, closed down US$0.03 to US$74.22.

Gold traded near a record high midafternoon on Wednesday, pushed up by expectations interest rates will continue to fall and lower treasury yields. Gold for December delivery was last seen up US$11.90 to US$2,696.50 per ounce, after earlier trading at US$2,702.50. above the record close of US$2,694.90 set on Sept.26.

In terms of specific stocks, BlackBerry (BB.TO, BB) closed up 4.7% to $3.60 after saying it expects to return to profitability in its fiscal 2025, up from what it called a "significant loss position" in fiscal 2023. At its Investor Day presentations on Wednesday, the former smartphone maker said revenues for fiscal 2025, 2026 and 2027 are anticipated to be between US$591-$616 million, US$620-$650 million and US$655-$685 million respectively, a 5% compound growth rate over the period..

On economic matters, Jason Daw, Head of North America Rates Strategy for RBC Dominion noted RBC recently made its first meaningful Bank of Canada (BoC) forecast change in over a year. Daw said the urgency for the BoC to front-load rate cuts and move at least into a neutral, and arguably an accommodative, policy setting, is rising.

RBC lowered its terminal rate forecast to 2% from 3%) and said it expects the central bank to make consecutive 50 basis-point cuts. Of note, supported by a totally different macro set-up, RBC continues to think the Federal Reserve will end its cutting cycle with rates at 4.0% to 4.25%, as rates diverge between the BoC and the Fed.

According to Daw, a short history lesson provides the starting point for assessing how far the BoC can stray from the Fed. In many cases - cuts in 2015 (Fed on hold), hikes in 2010 (Fed on hold), hikes and cuts in 2003 (Fed cut near to the first BoC hike and then on hold), and 225bp more of BoC vs Fed cuts in 1995 to 1996 - the BoC has done what was justified by the domestic data, Daw said, before adding it is important to remember the BoC-Fed policy gap was +200bp in 2003 and -200bp in 1995-96.

He noted the only episodes over the past 30 years where policy cycles were very aligned was during 'common shocks' - such as the 2001 tech bubble, 2005-2007 commodity boom, 2008 GFC, and into/out of the COVID period. "Absent an unforeseen development, the BoC should be able to forge its own path," Daw added.