TORONTO — Canada's main stock index was down almost 200 points Monday,weighed down by losses in information technology, utilities and energy, while U.S. stock markets were also in the red.
The S&P/TSX composite index was down 189.70 points at 19,921.81.
In New York, the Dow Jones industrial average was down 211.16 points at 33,536.70. The S&P 500 index was down 35.68 points at 3,957.25,while the Nasdaq composite was down 127.11 points at 11,196.22.
“Everything is chillier than it was last week,” said Craig Fehr, investment strategist at Edward Jones. “The markets were about as hot as they could get.”
However, Monday’s relatively benign market moves could almost be seen as a win given the wild swings of last week on better-than-expected inflation data in the U.S., said Fehr, in which the Dow was up by more than 1,200 points on Thursday.
“Given the strength of the gains last week, it would have been pretty easy for markets to take a breather and get some of that back,” he said.
“The fact that we're broadly seeing the equity markets hold in there, I think can be viewed as a positive and I think reflects the fact that we're starting to see the pendulum of sentiment come off of extreme pessimism ever so slightly.”
Fehr said the U.S. markets, especially the Nasdaq, are being swayed in part by a jump in U.S. treasury yields.
Canadian markets were likely dragged a little further down by the price of crude oil, said Fehr.
On Monday, OPEC cut its oil demand growth forecast for the rest of the year, and also trimmed its forecast for 2023.
The Canadian dollar continued its upward trend, trading for 75.26 cents US compared with 74.75 cents US on Nov. 10.
Fehr said the Canadian dollar is likely seeing lower crude oil prices counterbalanced by a rise in gold.
“I don't know that there's a whole lot of read through in the benign move in the loonie today except to say we're going to continue to see it governed by the differential and interest rates,” he said. “In my opinion, that's probably going to be the more prominent influence over the balance of the year.”
The December crude oil contract was down US$3.09 at US$85.87 per barrel and the December natural gas contract was up 5.4 cents at US$5.93 per mmBTU.
The December gold contract was up US$7.50 at US$1,776.90 an ounce and the December copper contract was down eight cents at US$3.83 a pound.
Though Monday has been a relatively quiet day for the markets, Fehr said there’s some good news to be had. Over the past couple of months, he said quiet days have often seen markets slump, taking the “path of least resistance.”
But today, the path of least resistance appears to be more balanced, he said.
“It is somewhat positive to see that in the absence of new incrementally positive news ... the markets are holding in there,” said Fehr.
“We’re continuing to see markets find some footing. And that’s a good sign.”
This report by The Canadian Press was first published Nov. 14, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
The Canadian Press
