TORONTO — Canada’s main stock index was down more than 80 points Thursday, led by losses in energy and metals, while U.S. markets were mixed after key data releases showed the economy continues to slow.
The S&P/TSX composite index was down 81.70 points at 20,417.61.
In New York, the Dow Jones industrial average was down 221.82 points at 33,309.51. The S&P 500 index was down 7.02 points at 4,130.62, while the Nasdaq composite was up 22.07 points at 12,328.51.
U.S. jobless claims rose last week to their highest level in a year and a half at 264,000, around 20,000 more than analysts were expecting. Meanwhile, the Producer Price Index showed that wholesale prices in the U.S. rose modestly in April, the 10th straight slowdown for the figure.
“The biggest thing we got from the PPI and the jobless report (seems to be) that the economy is losing steam or slowing down, which in the big picture is what the government wants,” said Michael Currie, senior investment adviser at TD Wealth.
“The market’s caught on both sides,” he added. “If it looks like the economy’s slowing, people are worried we’re going into recession. If it looks like the economy’s strong, looks like they’re going to hike rates more. And nobody wants either one.”
In the longer term it’s good news that the economy is slowing, but in the short term markets seem to see it as bad news, “even though we knew it was coming,” said Currie.
As usual, the rate-sensitive tech sector reacted with more optimism to the economic data that bolsters expectations of a rate pause by the Federal Reserve at its next meeting, Currie said.
However, rate cuts this year are looking less and less likely, he noted, as inflation is still much higher than the central bank’s target of two per cent.
“They’re certainly not taking their foot off the brakes anytime soon,” he said.
Oil also slumped somewhat Thursday amid continued proof of economic slowing, said Currie, while an earnings miss by Disney saw the entertainment company’s stock sink almost nine per cent after it said it lost four million subscribers in the first quarter.
“In a market like this, people are looking to see a beat, they’re looking to see guidance raised,” Currie said.
Meanwhile in the Canadian earnings season, shares in CI Financial soared more than 23 per cent after the firm said it would sell a stake in its U.S. wealth management division to help pay down debt, while also beating quarterly earnings estimates.
Companies like Nutrien and Canadian Tire reported mediocre results, said Currie.
The Canadian dollar traded for 74.20 cents UScompared with 74.77 cents US on Wednesday.
The June crude contract was down US$1.69 at US$70.87 per barrel and the June natural gas contract was down less than a penny at US$2.19 per mmBTU.
The June gold contract was down US$16.60 at US$2,020.50 an ounce and the July copper contract was down 13 cents at US$3.71 a pound.
— With files from Associated Press
This report by The Canadian Press was first published May 11, 2023.
Companies in this story: (TSX:GSPTSE, TSX_CADUSD=X)
