S&P/TSX composite falls more than 200 points led by energy, U.S. markets also slide

TORONTO –

Canada’s major inventory index was down greater than 200 factors Tuesday with broad-based losses led by power, whereas U.S. markets additionally fell.

“We’re now entering the heart of earnings season,” mentioned Angelo Kourkafas, an funding strategist at Edward Jones, including that Canadian earnings additionally begin ramping up this week.

The S&P/TSX composite index was down 236.87 factors at 20,439.87, with the TSX power index down greater than two per cent.

In New York, the Dow Jones industrial common was down 344.57 factors at 33,530.83.The S&P 500 index was down 65.41 factors at 4,071.63,whereas the Nasdaq composite was down 238.04 factors, or nearly two per cent, at 11,799.16.

Tuesday’s swing comes after an extended stretch of unusually low volatility as buyers anticipated an avalanche of earnings, mentioned Kourkafas.

Results have been blended to this point, he mentioned.

“I think the theme of a slowdown is emerging.”

Investors have been extra defensive Tuesday, mentioned Kourkafas, with bond yields shifting decrease.

“I think we are seeing a clear rotation out of cyclicals, whether it’s energy, industrials, materials and some tech, into the defensive sectors,” he mentioned.

While the bar had been lowered for banks, making it simpler for them to exceed expectations, tech corporations are beneath extra strain, with among the largest names together with Alphabet and Microsoft reporting this week, mentioned Kourkafas.

“A lot of these names … have led the gains this year, so the bar is high,” he mentioned.

“It’s all about the earnings now,” mentioned Kourkafas, but additionally about corporations’ steerage for the remainder of the 12 months.

On Tuesday, UPS missed on its first-quarter earnings, whereas shares in First Republic Bank dropped nearly 50 per cent after its earnings report revealed the extent of the banking disaster’ injury on its deposits. Meanwhile, General Motors noticed its revenue improve due to robust U.S. gross sales.

Investors are additionally gearing up for the Federal Reserve’s interest-rate determination subsequent week, mentioned Kourkafas. The central financial institution is extensively anticipated to hike after which pause, echoing the Bank of Canada’s earlier transfer, he mentioned.

The Canadian greenback traded for 73.41 cents UScompared with 73.84 cents US on Monday.

The June crude contract was down US$1.69 at US$77.07 per barrel and the June pure gasoline contract was down three cents at US$2.44 per mmBTU.

The June gold contract was up US$4.70 at US$2,004.50 an ounceand the July copper contract was down 10 cents at US$3.87 a pound.

This report by The Canadian Press was first printed April 25, 2023