TORONTO — Canada's main stock index slipped just over 100 points on the last day of trading in 2022, with mixed results across sectors, while U.S. markets were only slightly down after reversing early-afternoon lows.
The S&P/TSX composite index was down 100.97 points at 19,384.92.
In New York, the Dow Jones industrial average was down 73.55 points at 33,147.25.The S&P 500 index was down 0.78 points at 3,839.50, while the Nasdaq composite was down 11.61 points at 10,466.48.
The S&P 500 closed out 2022 with its worst showing since 2008, down 19.4 per cent, though it hasn’t seen losses of the magnitude it saw during the crisis, said Ian Chong, associate portfolio manager for First Avenue Investment Counsel Inc.
The other major indexes were also down on the year, with the Dow down 8.8 per cent and the Nasdaq 33.1 per cent, while the TSX’s losses were 8.72 per cent, buoyed by a strong year for energy stocks.
“It’s been a tough year all around,” said Chong.
“December is supposed to be a pretty good month, if you look at the performance historically, and we just didn't get that.”
Investors are focused on what is widely expected to be a tough first half of the new year, Chong said.
“The shift has moved from inflation fears to recession fears,” he said.
Chong said he thinks a mild recession in the first half of the year is the most likely scenario.
The Canadian dollar traded for 73.83 US compared with 73.76 cents US on Thursday.
The TSX’s energy index was up half a per cent, while the telecom index was up 2.62 per cent on news that the Competition Tribunal has dismissed a challenge to Rogers Communications Inc.'s takeover of Shaw Communications Inc.
Markets in 2022 have been “hyper-focused” on economic data releases like inflation, employment and GDP, looking for hints into the central banks’ rate-hike decisions, said Chong. While that might still be the case as 2023 begins, he said the next round of earnings will help shift investors’ focus.
“I think that shift will be refocused on corporate earnings soon enough, when they start seeing those year-over-year declines. And then they'll really start zoning in on earnings margins and growth at the corporate level, and then figuring out what the appropriate valuation will be,” he said.
“I think that the early February (Federal Reserve) meeting is going to be very telling.”
Oil prices were up Friday, likely on further optimism about demand as the effects of China relaxing its COVID rules begin to play out, said Chong.
The February crude contract was up US$1.86 at US$80.26 per barreland the February natural gas contract was down eight cents at US$4.48 per mmBTU.
The February gold contract was up 20 cents at US$1,826.20 an ounce and the March copper contract was down one cent at US$3.81 a pound.
This report by The Canadian Press was first published Dec. 30, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
