Weakness in financial stocks Tuesday weighed on Canada’s main stock index, which lost more than 100 points, while U.S. markets were mixed.
The S&P/TSX composite index closed down 103.93 points at 20,970.98.
In New York, the Dow Jones industrial average was down 157.85 points at 37,525.16. The S&P 500 index was down 7.04 points at 4,756.50, while the Nasdaq composite was up 13.94 points at 14,857.71.
Nvidia shares continued to rise Tuesday, hitting another record at US$531.40. That helped the Nasdaq post a small gain while its peers ended the day in the red.
Markets have been wavering as investors prepare for big economic news coming later this week, said John Zechner, chairman and lead equity manager at J Zechner Associates.
“Now people are just waiting and watching a little bit and waiting for things to unfold,” he said.
On Thursday, the latest U.S. inflation data will give investors an update on how the Federal Reserve’s monetary policy is working. If the inflation numbers come in slightly better than expected, that could prompt a rally in markets, said Zechner.
Get breaking National news
Investors have been looking for signs that could support cuts to the Fed’s overnight rate. While expectations have been wavering back and forth, right now they seem to have landed on May as the first month that the bank will cut, he said.
The first week of 2024 saw markets pare back after a nine-week winning streak on Wall St. to end 2023.
“November (and) December borrowed, I think, a little bit forward from this year, and we had a pretty strong rally,” Zechner said.
Monday’s bounce back after a weak start to the year wasn’t a surprise, said Zechner.
“There’s still cash on the sidelines to buy the dips, and I think they stepped in and bought it.”
On Friday, U.S. earnings season for the fourth quarter begins, starting with the big U.S. banks. Investors will be watching for updates to the banks’ credit loss provisions, noted Zechner.
“Everybody knows the fourth quarter was pretty good economically,” he said. However, investors will likely be more interested in what companies have to say in terms of guidance, he added.
The Canadian dollar traded for 74.68 cents US compared with 74.78 cents US on Monday.
The February crude oil contract was up US$1.47 at US$72.24 per barrel and the February natural gas contract was up 21 cents at US$3.19 per mmBTU.
The February gold contract was down 50 cents at US$2,033 an ounce and the March copper contract was down five cents at US$3.76 a pound.
— With files from The Associated Press
Comments