S&P/TSX composite drops nearly 400 points, US stock market also falls

Canada’s main stock index ended down nearly 400 points for a third straight day of losses amid better-than-expected jobs numbers and expectations of further rate hikes on both sides of the border. gender.

S&P /TSX The composite index closed down 395.88 points, or 2.1%, at 18,583.13.

Colin Cieszynski, chief market strategist at SIA Wealth Management, said markets were hit hard on Friday, particularly in the US.

In New York, the Dow Jones Industrial Average fell 630.15 points, or 2.1%, to 29,296.79. The S&P 500 index fell 104.86 points, or 2.8%, to 3,639.66, while the Nasdaq composite fell 420.91 points, or 3.8%, to 10,652.40.

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S&P/TSX composite drops more than 100 points in late morning trading

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Cieszynski said Canada had a bit of a boost thanks to better-than-expected job numbers announced today, as well as a rebound in crude oil.

The Canadian economy saw a modest increase in employment in September, while the unemployment rate fell to 5.2%.

Cieszynski said Friday’s US nonfarm payrolls data was also better than expected.

That means central banks don’t need to pivot away from their quantitative tightening paths, he said.

The BMO chief economist, Douglas Porter, said in a note Friday morning that the bank was still predicting a rate hike of half a percentage point at the Bank of Canada’s meeting this month, but added that the upcoming Business Outlook Survey and inflation data could change that.

Of course, analysts have said that some so-called bad news on jobs, inflation or earnings could actually be good news for the market, as it could signal the end of the interest rate hike. capacity.

But Cieszynski said good news is still good news – the latest figures show that central banks have succeeded in defusing bubbles without sending markets into crisis.

“That means the economy is going up,” he said. “We don’t want things to spiral into a spiral of crisis. That would be a disaster for everyone. “

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The Canadian dollar traded for 72.93 US cents versus 72.89 US cents on Thursday.

The November crude oil contract was up $4.19 at $92.64 a barrel and the November natural gas contract was down 22.4 cents at $6.75/mmBTU.

The gold contract for December delivery was down $11.50 at $1,709.30 an ounce and the December contract was down nearly 6 cents at $3.39 a pound.

Cieszynski said he will be keeping a close eye on earnings season in the US, especially for global companies that may be affected by the appreciation of the US dollar.

“We’ve had a general slowdown in the economy, but the bigger problem for Americans will be their dollar,” he said.

“The US dollar has just risen so much against everything that I think it will be a problem for companies in their earnings.”

© 2022 Canadian Press


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