Energy losses drag S&P/TSX composite down Wednesday, U.S. markets mixed

TORONTO — Canada's main stock index edged lower Wednesday, led again by losses in energy as the price of oil continued to decline, while U.S. markets wobbled to a mixed close.

The S&P/TSX composite index closed down 45.38 points at 19,530.21.

In New York, the Dow Jones industrial average was down 40.33 points at 34,112.27. The S&P 500 index was up 4.40 points at 4,382.78, while the Nasdaq composite was up 10.56 points at 13,650.41.

Nearing the end of what’s been a very volatile year for the markets, investors are still uncertain as they look to 2024, said Mona Heidari, senior financial advisor at BlueShore Financial.

“We still don't know if we are heading into a recession, or if we are going to get a soft landing,” she said.

Inflation, which is still too high, and interest rates have been the two key focus points for investors this year, said Heidari.

“I think they will remain front and centre for the next while,” she said.

Some of the economic data point toward a recession, like high household debt, while other reports support a soft landing, like the resilient labour market, said Heidari.

One thing that’s certain, though, is that the fight against inflation isn’t over. Central banks have made it clear they intend to hold their overnight rates high as long as is necessary to quell price growth.

Amid all the uncertainty, investors have been flocking to less risky investments, like inflation-linked bonds, guaranteed investment certificates and commodities, said Heidari.

“A lot of people are still sitting on the sidelines, waiting to see what transpires next year.”

This risk aversion can be seen in investors’ reactions to third-quarter earnings from tech companies, a sector that’s been dominated by a few industry giants. Despite earnings beats this season, stock prices haven’t risen in tandem, said Heidari.

Overall, most companies that have reported so far in the U.S. beat Wall Street forecasts. But the bond market has been a bigger driver of market movements, reported The Associated Press, as higher yields have been putting pressure on equities.

The Canadian dollar traded for 72.48 cents UScompared with 72.67 cents US on Tuesday.

The December crude contract was down US$2.04 at US$75.33 per barreland the December natural gas contract was down three cents at US$3.11 per mmBTU.

The December gold contract was down US$15.70 at US$1,957.80 an ounceand the December copper contract was down four cents at US$3.64 a pound.

— With files from The Associated Press

This report by The Canadian Press was first published Nov. 8, 2023.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Rosa Saba, The Canadian Press