A currency trader checks monitors at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Monday, Nov. 21, 2022. Asian stock markets sank Monday after Wall Street ended with a loss for the week amid anxiety about Federal Reserve plans for more interest rate hikes to cool inflation. THE CANADIAN PRESS/AP-Ahn Young-joon
TORONTO – Canada’s main stock index barely slipped Monday, while markets in the U.S., especially the Nasdaq, were down more as tech stocks fell.
The S&P/TSX composite index closed down 3.78 points at 19,977.13.
In New York, the Dow Jones industrial average was down 45.41 points at 33,700.28.The S&P 500 index was down 15.40 points at 3,949.94,while the Nasdaq composite was down 121.55 points at 11,024.51, pulled down by losses at the likes of Apple, Alphabet Inc., Tesla Inc. and Meta.
This is a historically quiet time for the markets, said Angelo Kourkafas, an investment strategist at Edward Jones, noting that markets in the U.S. are closed Thursday because of Thanksgiving. Investors are in a “risk-off” mood, he said.
Kourkafas said after market rallies earlier in the month, he expects markets to continue in a holding pattern for the next week or so.
“It wouldn’t be surprising to see stocks consolidate or stay range-bound in the absence of any major headlines,” he said.
Both the U.S. and Canada will have one more inflation data release before the end of the year, and one more central bank announcement on interest rates, noted Kourkafas. Both banks are expected to raise rates again, but to show signs of slowing their tightening campaigns.
However, Kourkafas said with increasing chances that the terminal rates will be a little higher than previously expected, markets are already pricing in higher terminal rates, which he said is good news.
“Policymakers are trying to convey the message that we are considering a slowdown, but there’s more work to do.”
The Fed’s December meeting is going to be the “last major catalyst” for markets in 2022, said Kourkafas.
“Because really, throughout the year, it all has been about how far central banks will tighten,” he said, noting that while inflation has shown signs of moderating, investors are still looking for more evidence that moderation will continue.
The Canadian dollar traded for 74.34 cents US, compared with 74.71 cents US on Friday.
Oil prices recovered in the afternoon from their mid-morning drop of almost five dollars a barrel, but were still slightly down.
The January crude oil contract was down seven cents at US$80.04 per barrel and the December natural gas contract was up 47 cents at US$6.78 per mmBTU.
Recent headlines about China’s COVID policies have sparked concerns about global demand for oil, said Kourkafas.
“China is a big commodity consumer, and as a result, because of the negative headlines, we have seen oil prices fall,” he said.
The December gold contract was down US$14.80 at US$1,739.60 an ounceand the December copper contract was down six cents at US$3.57 a pound.
This report by The Canadian Press was first published Nov. 21, 2022.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
