Canada’s main stock index closed flat on Wednesday, with strength in the energy sector providing support, while U.S. markets experienced declines. The S&P/TSX composite index ended the day down less than one point at 19,899.07. In New York, the Dow Jones industrial average was down 180.65 points at 34,765.74, the S&P 500 index was down 33.53 points at 4,404.33, and the Nasdaq composite was down 156.42 points at 13,474.63.
According to Angelo Kourkafas, an investment strategist at Edward Jones, concerns about China’s economy have been a major driver of the pullback observed in August. However, policymakers are making efforts to provide stimulus, which could help stabilize the economy in the future. In the near term, global risk sentiment will continue to face headwinds.
Kourkafas mentioned that the climbing yields of ten-year bonds are putting pressure on tech and growth stocks that have led the market rally this year. There is also uncertainty surrounding the actions of central banks in the coming months. Minutes from the Federal Reserve’s recent decision indicated that officials still view inflation as a continuing threat, but there are signs of inflation pressures easing, resulting in a mixed message from the central bank.
Looking ahead, central banks will continue to depend on economic data as they enter the fall season. Kourkafas noted that the data has already shown improvement since the Fed’s decision last month.
In terms of commodities, oil prices dipped below US$80 per barrel due to concerns about global demand resulting from China’s economic slowdown. China, being a major consumer of oil and commodities, has experienced disappointing economic data over the past few weeks.
At the end of the trading day, the Canadian dollar traded at 73.98 cents US compared to 74.17 cents US on Tuesday. The September crude contract was down US$1.61 at US$79.38 per barrel, and the September natural gas contract was down seven cents at US$2.59 per mmBTU. The December gold contract was down US$6.90 at US$1,928.30 an ounce, and the September copper contract was down a penny at US$3.66 a pound.
This article contains information from The Associated Press and was written by The Canadian Press.
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