S&P/TSX composite index dips alongside U.S. markets in Tuesday trading

TORONTO –

Canada’s major inventory market nudged southward in buying and selling on Tuesday, consistent with an even bigger dip in U.S. markets.

Stocks tumbled as worries concerning the banking system and the worldwide financial system injected extra warning into monetary markets worldwide. Bank shares helped lead the market decrease after Moody’s reduce the credit score scores for 10 smaller and mid-sized monetary establishments.

“It seemed like a lot of the issues that were raised during the March banking crisis were ignited — higher yields, potential regulation, and then, of course, some risks around exposure to commercial real estate,” mentioned Mona Mahajan, senior funding strategist with Edward Jones.

“I think that group has been under pressure today, in both the U.S. and it looks like in Canada, financials are somewhat lower across the board.”

The S&P/TSX composite index fell 30.06 factors to twenty,205.98, dragged down by metals and financials shares.

In New York, the Dow Jones industrial common dropped 158.64 factors to 35,314.49. The S&P 500 index was down 19.06 factors at 4,499.38, whereas the Nasdaq composite was down 110.07 factors at 13,884.32.

The Moody’s downgrade had a ripple impact in Canada, the place the sentiment round financials was extra cautious on Tuesday, Mahajan mentioned.

“Canadian banks tend not to have much commercial real estate exposure, but ΓǪ they’re also facing higher rates, asset liability, mismanagement, potential for more regulation,” she mentioned.

“I think generally, in the U.S. and Canada, if the economy is softening, financials tend to be more cyclical in nature and they tend to not do as well in those environments.”

Earnings season additionally continued, with 89 per cent of corporations listed on the S&P 500 index having reported for the quarter as of Tuesday. Of these, almost 80 per cent have positively shocked on the underside line, by a mean of seven.5 per cent, mentioned Mahajan.

While it has marked the third straight quarter of adverse year-over-year earnings development, outcomes up to now have indicated a gradual restoration might be unfolding.

“That’s a better environment broadly,” mentioned Mahajan.

“We think if earnings are growing, central banks are potentially pausing and maybe even pivoting lower next year, and inflation is moderating, that will be welcomed news.”

The Canadian greenback traded for 74.32 cents US in contrast with 74.88 cents US on Friday.

The September crude oil contract was up 98 cents at US$82.92 per barrel and the September pure fuel contract was up 5 cents at US$2.78 per mmBTU.

The December gold contract was down US$10.10 at US$1,959.90 an oz and the September copper contract was down seven cents at US$3.77 a pound.

With information from The Associated Press

This report by The Canadian Press was first revealed Aug. 8, 2023.