North American stock markets drift lower on path to first monthly loss since March

North American stock markets drift lower on path to first monthly loss since March

TORONTO — North American stock markets are heading toward their first monthly losses since March’s sharp correction after drifting lower on the penultimate day of trading in September.

The tech-heavy Nasdaq is leading the declines and is on track to lose 5.5 per cent for the month.

“The TSX is actually outperforming all of its global peers and again that’s mainly attributed to the fact that the tech sector has assumed the brunt of the selling pressure this month,” said Candice Bangsund, portfolio manager for Fiera Capital.

The Toronto-based market is 1.9 per cent lower with one day of trading remaining, while the S&P 500 is down 4.7 per cent and the Dow is off 3.3 per cent.

“I think it says first and foremost that the unrelenting rally in tech stocks was probably overdone and due for a pullback,” she said in an interview.

The more value-oriented sectors like energy, financials and industrials haven’t participated in the strong summer rally but will outperform technology as investors take some profits in tech after some massive gains, she added.

Markets declined Tuesday on uncertainty over U.S. politicians reaching a fiscal stimulus agreement before the election and concerns that a spike in global COVID-19 infection rates is threatening to derail the economic recovery.

Bangsund said the renewed market volatility in September can be attributed to a second or third wave of cases in Europe, the U.S. and even Canada.

“Investors are digesting these headlines of rising cases that threaten the return of those economically disruptive measures to contain the spread of the virus,” she said, pointing to record new cases in Britain, Spain and France that are twice as high as the peaks earlier this year.

“So it’s creating a worrisome backdrop and unnerving investors, given the potential for renewed restrictions that would inevitably weigh on economic activity.”

That was partially offset Tuesday by a rebounding of U.S. consumer confidence in September that exceeded economist expectations.

The S&P/TSX composite index closed down 31.29 points to 16,211.52 after hitting an intraday low of 16,131.51.

In New York, the Dow Jones industrial average was down 131.40 points at 27,452.66. The S&P 500 index was down 16.13 points at 3,335.47, while the Nasdaq composite was down 32.28 points at 11,085.25.

The Canadian dollar traded for 74.68 cents US compared with 74.75 cents US on Monday.

Energy led the sector declines on the TSX, falling by 4.3 per cent on a drop in crude oil prices over renewed demand worries.

The November crude oil contract was down US$1.31 at US$39.29 per barrel and the November natural gas contract was down 23.4 cents at US$2.56 per mmBTU.

Several Canadian oil producers sustained share price losses, led by Crescent Point Energy Corp. down 6.4 per cent, Vermilion Energy Inc. 6.2 per cent lower and Cenovus Energy Inc. off 5.6 per cent.

Financials was down 1.4 per cent.

Technology was one of four sectors to gain, rising 1.8 per cent as shares of Shopify Inc. climbed six per cent after it announced a shuffling of its executives and departure of saying goodbye to a member of its leadership team..

Materials rose nearly one percentage point as higher gold prices helped companies like MAG Silver Corp., which was up 8.9 per cent.

The December gold contract was up US$20.90 at US$1,903.20 an ounce and the December copper contract was unchanged at US$2.99 a pound.

“Gold is rising today with unnerved investors flocking to the safety of the safe haven metal, while the weak U.S. dollar is also boosting gold prices,” said Bangsund.

Industrials was up slightly even though Air Canada dropped 3.7 per cent.

Bangsund said investors will be watching closely the outcome of Tuesday night’s U.S. presidential debate, keeping an eye on polls and betting after the event.

Democratic nominee Joe Biden’s lead in polls is likely providing some calm to markets despite concerns about his promise to raise corporate taxes, she said.

“I think the bigger concern would be if the polls narrowed and it was looking like an increasingly tight race that would spark the risk of a contested or inconclusive result,” Bangsund noted.

“And that, of course, could create some volatile conditions in November. So, it will be key to be watching the polls following the debate this evening.”

This report by The Canadian Press was first published Sept. 29, 2020.


Ross Marowits, The Canadian Press


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Red Deer Senior Citizens Downtown House re-opened earlier this month. (Photo by Sean McIntosh/Advocate staff)
Red Deer Senior Citizens Downtown House re-opens

The Red Deer Senior Citizens Downtown House was closed for months due… Continue reading

Guy Pelletier, vice-president of the Red Deer region for Melcor Developments. (Contributed photo).
Melcor has to redesign new neighbourhood after Molly Banister decision

City council disagreed with administration’s recommendation to scrap road plans

About $135,000 is available in grants for central Alberta organizations that are empowering women, girls and supporting gender-diverse people through their mission, activities or partnerships. Contributed photo
$135K in funding available in central Alberta for charities advancing gender equality

The Red Deer & District Community Foundation is providing $135,000 to local… Continue reading

Alice Kolisnyk, deputy director of the Red Deer Food Bank, says the agency expects an increase in demand as the COVID-19 pandemic continues. Every new subscription to the Red Deer Advocate includes a $50 donation to the food bank. (Photo by BYRON HACKETT/Advocate Staff)
Support the food bank with a subscription to the Red Deer Advocate

The community’s most vulnerable members are always in need of a hand,… Continue reading

Sharon Hickin, general manager of the Days Inn Sylvan Lake and the new Lake House Diner, poses for a photo outside the new restaurant. Photo by Megan Roth/Sylvan Lake News
Pandemic puts extra hurdles in place for new Sylvan Lake businesses

Over the past seven months numerous new businesses have opened in Sylvan Lake, despite the pandemic

Email letters to
The problem isn’t dispatching, it’s a shortage of ambulances

Having worked in EMS for more than 43 years, and having lobbied… Continue reading

file photo
Maskwacis RCMP investigate pedestrian fatality

Collision on Highway 2A causing fatality still under investigation.

March 14, 2019 - Head shot of Toronto Star columnist Heather Scoffield.    DAVE CHAN FOR THE TORONTO STAR
Opinion: Canada is missing a recovery plan

The glitches should have been a sign of what was to come.… Continue reading

A recent Lock it or Lose it campaign at Parkland Mall found only 35 per cent of drivers took action to make their vehicles less tempting to criminals. (Photo by SUSAN ZIELINSKI/Advocate staff)
Michael Dawe: Parkland Mall transformed region’s retail landscape

Fifty years ago, on Nov. 3, 1970, there was a major boost… Continue reading

Los Angeles Dodgers celebrate after defeating the Tampa Bay Rays 3-1 to win the baseball World Series in Game 6 Tuesday, Oct. 27, 2020, in Arlington, Texas. (AP Photo/David J. Phillip)
Fitting finale: Dodgers win title, Turner tests positive

Turner returns to the diamond about an hour after the game

Most Read