04:22 PM EST, 11/13/2024 (MT Newswires) -- The Toronto Stock Exchange rose to a second-straight record close on Wednesday, continuing its rally following the U.S. election but failed to hold the 25,000 mark it touched for a second day,

The S&P/TSX Composite Index closed up 66.01 points to 24,989.02. Information Technology, up 2.28%, was the biggest gainer on the day, while Battery Metals and Base Metals were the biggest decliners, down 1.47% and 1.6% respectively. Declining issues outpaced advancers 952 to 950, with 171 listings closing unchanged.

West Texas Intermediate (WTI) oil closed with a small gain on Wednesday, settling into a narrow trading range amid weak demand from China and the threat of higher supply. WTI crude oil for December delivery closed up US$0.31 to settle at US$68.43 per barrel, while January Brent crude, the global benchmark, closed up US$0.39 to US$72.28.

Gold prices traded lower late afternoon on Wednesday, falling for a fourth-straight session as the dollar rose after a report showed U.S. inflation rose in line with expectations last month. Gold for December delivery was last seen down US$26.30 to US$2,580.00 per ounce.

While the market is buoyed by hopes for lower interest rates and a rising U.S. economy, Desjardins warned Trump's promised policies may not benefit Canada's economy. It said it will not be long before Canada's economy feels the impact of the U.S. election. It noted trade is the most important channel by which protectionist and isolationist policies south of the border will be transmitted northward, with the promise of significant tariffs featuring prominently in the election campaign. Desjardins research suggests the impact on Canada could be "swift and severe, potentially risking a recession in the worst-case scenario."

It noted the downside risk to the Canadian economic outlook is further compounded by the recently announced plan by Canada's government to reduce the target for permanent resident admissions. This is in addition to a previously planned reduction in non-permanent residents. Add to this, Desjardins said, the impending squeeze on household budgets from the wall of mortgage renewals in 2025 and 2026.

According to Desjardins, it has been forced to revise its outlook for the Canadian economy "meaningfully lower" starting in 2026, and it expects the Bank of Canada will do the same.

In its forecast tables, Desjardins expects real GDP growth of just 1.1% in 2024 and 2.2% in 2025, and an inflation rate of 2.3% in 2024 and 2% in 2025. It sees the key benchmark interest rate at 3.5% end 2024 and 3% end at the end of next year's first quarter, before three more 25 basis points cut in each of the next three quarters.

The agency also revised its U.S. forecast now that Donald Trump has been re-elected. It noted the new administration should be eager to move ahead with his proposals of more tax cuts, deregulation (of the energy sector in particular), higher tariffs and less immigration. Desjardins said this could have some positive effects on growth in 2025, but it assumes that the more negative impacts, especially as a result of higher tariffs, will probably start being felt in 2026.

These measures, it added, will probably push inflation higher than expected.

For now, Desjardins said, the U.S. economy "remains in fairly good shape, aside from a few disruptions". Real GDP growth "remained relatively robust" in the third quarter, with an annualized gain of 2.8%. But growth could come in weaker in the fourth quarter, particularly due to the impact of hurricanes. In combination with the strike in the aerospace industry, hurricanes led to a slowdown in hiring in October, Desjardins noted.