TORONTO — Canada's main stock index moved lower on Thursday, led by weakness in technology and base metals, while U.S. markets were also down, with the Nasdaq falling 1.7 per cent.
The S&P/TSX composite index closed down 84.26 points at 23,037.47.
In New York, the Dow Jones industrial average was down 177.71 points at 40,712.78. The S&P 500 index was down 50.21 points at 5,570.64, while the Nasdaq composite was down 299.63 points at 17,619.35.
Markets started the day on a more positive note before selling off, said Allan Small, senior investment adviser at iA Private Wealth.
Treasury yields rose after some new economic data in the U.S., with one report showing slightly more workers applied for unemployment benefits last week than expected, and another giving a mixed bag on U.S. business activity.
Investors may also be taking some profits after an almost-unbroken run of positive trading days, he added.
But overall, Small said they are likely just looking ahead — somewhat nervously — to U.S. Federal Reserve chairman Jerome Powell’s speech Friday as the annual Jackson Hole symposium kicks off.
“I think we've been hearing some mixed messaging out of Fed officials,” said Small. “Some are dovish, some are a little hawkish.”
A 25-basis-point cut for September is baked into expectations now, said Small, but there’s still a lot of economic data to come before the Fed’s decision. However, he thinks a 50-basis-point cut, which some market watchers are calling for, is unlikely.
Recently the environment has shifted for markets, said Small, from weaker economic data being seen as good news for rate cuts, to bad news just being plain bad news.
In particular, markets are increasingly concerned about weakening in the job market, he said, and that’s trumping any lingering concerns about inflation.
“I don't think the market wants to see big job or small job gains or even job loss,” he said. “The market does not want to see contraction in manufacturing or manufacturing services. They don't want to see weak numbers, bad retail sales. They want to see good, but not too good.”
On Friday, investors will be listening for any sign from Powell that he sees that middle ground or Goldilocks scenario in the data, said Small.
“I think it's getting to the point where (if) they don't start cutting soon, it might be too late, and then they'll just be lambasted for being too late once again.”
In Canada, a work stoppage at the two major railways didn’t seem to weigh on the companies’ stock prices.
TD Bank shares were down more than two per cent after it reported a third-quarter loss due to the ongoing investigation into its anti-money-laundering measures.
The Canadian dollar traded for 73.52 cents US compared with 73.57 cents US on Wednesday.
The October crude oil contract was up US$1.08 at US$73.01 per barrel and the October natural gas contract was down 12 cents at US$2.19 per mmBTU.
The December gold contract was down US$30.80 at US$2,516.70. an ounce and the September copper contract was down four cents at US$4.15 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Aug. 22, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
