S&P/TSX composite index little changed Tuesday, U.S. markets mixed

Canada’s main stock index was little changed Tuesday as bank earnings began to roll in, while U.S. markets were mixed.

The S&P/TSX composite index was down 5.41 points at 21,318.90.

In New York, the Dow Jones industrial average was down 96.82 points at 38,972.41. The S&P 500 index was up 8.65 points at 5,078.18, while the Nasdaq composite was up 59.05 points at 16,035.30.

As Canadian bank earnings began with BMO and Scotiabank on Tuesday, investors were particularly disappointed by BMO, said Andrew Buntain, vice-president and portfolio manager, Fiduciary Trust Canada.

BMO’s revenue and earnings fell short of expectations, and the bank set aside more money for credit losses than it did a year earlier.

Scotiabank also put aside more money for bad loans, but its earnings surprised to the upside.

There’s a lot of trepidation now for what the other bank earnings will bring as the week continues, said Buntain.

“It’ll be very interesting to see what RBC, TD and National Bank come with, but I think you can expect more of those provisions for credit losses,” he said.

“It’s a reality that is beginning to set in, in the mindset of market watchers. And the consumer is very key as to what that looks like three to six months from now.”

In the U.S., markets largely continued to hold onto recent record highs. The market these days vacillates between pessimism over interest rate cuts that keep getting pushed further down the road, to optimism over growth due to artificial intelligence, said Buntain.

This week, investors get a bundle of economic data as the month comes to a close. Of particular interest is the core PCE report Thursday, which is the U.S. Federal Reserve’s preferred inflation gauge.

“I think the market is really struggling to find some direction when it comes to those macro indicators and rate policy,” said Buntain.

With expectations for the start of rate cuts now pushed to the summer, investors may be in for further disappointment if even that doesn’t materialize, said Buntain.

“That could make the second half very, very difficult terrain for bond investors,” he said.

A report Tuesday found that U.S. consumer confidence slipped unexpectedly, though expectations for inflation ticked lower. Another report showed that orders for long-lasting manufactured goods were also weaker than expected.

The Canadian dollar traded for 73.96 cents US compared with 73.99 cents US on Monday.

The April crude oil contract was up US$1.29 at US$78.87 per barrel and the April natural gas contract was up six cents at US$1.81 per mmBTU.

The April gold contract was up US$5.20 at US$2,044.10 an ounce and the May copper contract was up two cents at US$3.85 a pound.

— With files from The Associated Press