TSX, New York markets end flat as Fed meets; loonie barely changed

TORONTO – North American stock markets ended Tuesday mostly flat, as the focus zeroed in on the U.S. Federal Reserve’s two-day meeting on monetary policy.

The S&P/TSX composite index in Toronto was ahead by 25.75 points at 14,521.98, while the loonie dipped 0.01 of a cent at 75.71 cents US.

In New York, the Dow Jones industrial average was up 9.79 points at 18,129.96, with the broader S&P 500 index gaining 0.64 of a point at 2,139.76. The Nasdaq composite advanced 6.32 points at 5,241.35.

Investors are shying away from any major moves to the upside or the downside until Fed chair Janet Yellen speaks following the conclusion of the meeting on Wednesday.

Market watchers are not expecting the central bank to hike interest rates because the latest round of U.S. economic data has been weaker than expected. What will be closely watched is if Yellen provides any hints on whether a raise is still in the cards this year. The Fed will meet next in December.

Ben Jang, a portfolio manager at Nicola Wealth Management, said investors know the Fed will eventually have to move on interest rates. But the contentious issue is when that might happen, when so much depends on whether the data shows the U.S. economy is strong enough to support it.

“You’re not going to have a Goldilocks scenario where everything lines up perfectly,” Jang said from Vancouver. “They’ll need to do it regardless of whether the numbers are fantastic.”

Markets are also watching a decision out of the Bank of Japan. It’s expected the Asian central bank will take new steps to boost the ailing Japanese economy, which could include increasing its stimulus program or further cutting the deposit rate as a way to encourage banks to lend money.

Back home, Bank of Canada Governor Stephen Poloz cautioned that the central bank is in no rush to make any moves on low interest rates, which are expected to be in place for some time.

“Just by him saying, ‘We don’t have our finger on the trigger yet,’ for a cut is slightly more hawkish than the previous statement,” said Jang. “The guidance is that basically, don’t expect something for a while.”

In commodities, the November contract for crude oil gained 19 cents at US$44.05, while the October contract for natural gas climbed 11 cents to US$3.05 per mmBtu.

The December gold contract jumped 40 cents at US$1,318.20 per ounce and December copper was up a penny at $2.17 a pound.

Follow @LindaNguyenTO on Twitter.