TORONTO — Weakness in energy stocks drove Canada's main stock index to dip on Monday, while U.S. stock markets also fell to start the trading week.
Stephen Duench, vice-president and portfolio manager for AGF Investments Inc., said it was unsurprising to see the markets remain “fairly calm” following the “big swings” of the previous week, which marked the busiest week of the earnings calendar.
“The markets were quite strong and they're right up to the high end of the range in the last few months,” said Duench. “Today, we’ve seen back and forth in the markets a little bit but really, it's kind of just settling in at flat levels.”
The S&P/TSX composite index was down 21.44 points at 20,615.10.
In New York, the Dow Jones industrial average was down 46.46 points at 34,051.70. The S&P 500 index was down 1.61 points at 4,167.87, while the Nasdaq composite was down 13.99 points at 12,212.60.
He said all eyes will be on the U.S. Federal Reserve on Wednesday, which is expected to raise its benchmark interest rate for the 10th straight time in its yearlong effort to curb inflation.
“But I think it's more about what they say around that hike,” said Duench, noting many analysts anticipate a potential pause in the upcoming months.
“Is it going to be kind of a hawkish pause? Are they really going to signal that their job isn't done? Are they really going to make sure that the market knows that the door is still open for further rate hikes?”
The Canadian dollar traded for 73.82 cents US, compared with 73.65 cents US on Friday.
“This is really just the follow-through from last week’s strength,” said Duench. “If you look at Friday's performance on energy, it was by far the strongest sector. So I think it's just a little bit of normalization from what we saw as being one of the hottest sectors on Friday.”
The June crude contract was down US$1.12 at US$75.66 per barrel and the June natural gas contract was down nine cents at US$2.32 per mmBTU.
The June gold contract was down US$6.90 at US$1,992.20 an ounce and the July copper contract was up four cents at US$3.93 a pound.
This report by The Canadian Press was first published May 1, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Sammy Hudes, The Canadian Press
