Following the conclusion of the Labour Day weekend, markets across North America continued to slide following last weeks tumble. The TSX Composite index was down over 80 points, as the price of oil fell and the U.S. stock market losses continued.
However, there is light at the end of the tunnel. On Wednesday, Governor Tim Macklin will decide as to whether the Bank of Canada will keep the current interest rate at 0.25%. Back in July, Macklin pledged to keep the interest rate at 0.25%, and likely will be signing a similar tune tomorrow. In addition to the rate decision, the Governor will also continue to honor his promise of purchasing $5 billion (at least) a week in GoC (Government of Canada) bonds to keep borrowing costs low.
Despite a better than expected second quarter output (-13%), central bank policy makers are unlikely to change from their stance of “whatever the cost” to pull Canada’s economy out from its latest downturn despite the modest improvement.
Buckle up, the final 4 months of the year will likely get bumpy.
Works Cited:
https://ca.finance.yahoo.com/news/north-american-stock-markets-plunge-134702142.html