TORONTO – The Toronto Stock Exchange closed Friday’s session at its lowest level in nearly four weeks as its largest sectors came under some pressure ahead of Monday’s federal election.
A confluence of factors has affected markets on both sides of the border, including bad economic news from China, the rise in the number of COVID cases, uncertainty surrounding the US infrastructure plan and some unease. heading into the next election, observed Kevin Headland, senior investment strategist at Manulife Investment Management.
With another minority government expected in Ottawa, Liberal and Conservative tax plans are uncertain.
“Generally speaking, election results in Canada don’t really have any effect on the wider market,” Headland explained in an interview, “but what we saw before the previous election is a sense of unease, and the markets don’t like uncertainty. ”
“Just because it’s the Friday before Monday’s election, there might be a bit of profit taking (in the market).”
Toronto’s S & P / TSX Composite Index fell 111.74 points on Friday to end the session with 20,490.36 points, its lowest level since August 23.
In New York, the Dow Jones Industrials Average fell 166.44 points to 34,584.88 points, while the broader S&P 500 Index returned 40.76 points to 4,432.99 points. The Nasdaq composite index for its part dropped 137.95 points to 15,043.97 points.
A common thread between movements in the US and Canadian markets is the timing, with September generally being the worst month of the year, added Headland.
Even Thursday’s positive US retail sales data was viewed through the lens of what this might mean for the US Federal Reserve’s decision to gradually reduce its stimulus measures.
Investors are eagerly awaiting the central bank’s decision on interest rates and its guidance on its next steps, scheduled for Wednesday.
While the market doesn’t like the idea of cutting stimulus, the last time it was done, in 2013 and 2014, the repercussions were positive for the stock markets, Headland said.
“Right now, even positive news can be viewed as negative by this market.”
Nine of the Toronto Stock Exchange’s eleven sectors fell on Friday, especially energy, consumer staples, financials and materials.
The energy group fell nearly 2% due to the drop in the price of crude oil.
On the New York Commodities Exchange, the price of crude oil fell 55 cents US to US $ 71.82 per barrel, while that of natural gas fell 23 cents US to US $ 5.11 per million. BTU.
The price of gold fell US $ 5.30 to US $ 1,751.40 per ounce, while the price of copper fell 3.6 US cents to US $ 4.25 per pound.
In the currency market, the Canadian dollar traded at an average rate of 78.61 cents US, down from 78.90 cents US the previous day.
The Canadian Press