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“Monday Market Meltdown: S&P/TSX Composite and US Stocks Slide”
TORONTO – Canada’s main stock index shed more than 100 points on Monday on broad-based weakness, while U.S. markets were also down, with the Nasdaq falling a percent.
The S&P/TSX composite index fell 129.42 points to 20,628.92.
In New York, the Dow Jones industrial average fell 34.99 points to 33,891.02. The S&P 500 Index fell 25.40 points to 4,111.08, while the Nasdaq Composite fell 119.50 points to 11,887.45.
Investors were likely expecting a speech from Federal Reserve Chair Jerome Powell on Tuesday, said Ashish Utarid, associate vice president of investment strategy at IG Wealth Management.
While it’s a relatively quiet week in terms of economic data, Utarid noted that the University of Michigan will release its monthly consumer sentiment index on Friday.
“When market sentiment is at its lowest, it’s generally a bullish signal for markets a year down,” he said.
Monday continued Friday’s bearish reaction to hotter-than-expected payrolls data in the US.
The data showed that 517,000 jobs were added in the US, with unemployment at an all-time low.
Expectations are rising that the US Federal Reserve will keep interest rates high for longer in its attempt to fight inflation.
The TSX, meanwhile, was dragged lower by commodities on Monday, Utarid said, with both oil and commodities retreating from their January highs.
Although earnings so far in Canada and the US have been full of upside surprises, the materials sector has reported poor earnings and sales for its latest quarter so far due to lower prices in the last quarter of 2022, Utarid noted.
But he believes the sector has upside potential for the remainder of the year as China reopens.
“Commodity prices are pretty resilient going forward,” he said.
Although oil prices rose on Monday, the TSX energy index fell nearly 0.4 percent, while financials and industrials both fell more than 0.6 percent.
The Canadian dollar was trading at 74.39 US cents, compared to 74.68 US cents on Friday.
The March crude oil contract rose 72 cents to $74.11 a barrel and the March natural gas contract rose five cents to $2.46 a mmBTU.
The April gold contract rose $2.90 to $1,879.50 an ounce and the March copper contract fell two cents to $4.04 a pound.
— With files from The Associated Press
This report from The Canadian Press was first published on February 6, 2023.
Company in this story: (TSX:GSPTSE, TSX:CADUSD=X)
The Canadian Press
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