Q: Indications of a .5 point reduction in interest rate on Wednesday. If materializes which sectors would be a positive. I am thinking of investing in dfn and enb. Your thoughts
5i Research Answer:
Keep in mind the expected Bank of Canada rate cut is highly anticipated and is not likely to be dramatic news. But dividend stocks such as ENB, FTS, H, BEPC could see more positive sentiment. Financials could see some pick up. Consumer defensive stocks as well. The key here is whether Canada's economy is getting worse. Recent numbers have not been good. If we get a recession, the negative sentiment on that is likely to have more influence than rate cuts in the short term. DFN consists of mostly financial and energy stocks and could see some positive influence, but as a split-share corporation in can act differently at times.