S&P/TSX composite down almost 100 points Thursday, U.S. markets also decline
Canada’s main stock index closed down almost 100 points Thursday despite strength in energy stocks, while U.S. markets also moved lower a day after rating agency Fitch downgraded the U.S. government’s credit rating from AAA to AA+.
Investors will get more economic data Friday when both Canada and the U.S. release their latest reports on employment.
“It’s a pretty big day tomorrow,” said Hadiza Djataou, VP and portfolio manager of global bonds at Mackenzie Investments.
Investors saw economic data trickle in on Thursday, with a report showing that unemployment applications rose last week but remained relatively low, while a pair of reports showed signs of slowing in the services sector.
The S&P/TSX composite index closed down 97.47 points at 20,120.74.
In New York, the Dow Jones industrial average was down 66.63 points at 35,215.89. The S&P 500 index was down 11.50 points at 4,501.89,while the Nasdaq composite was down 13.73 points at 13,959.71.
Over the past month, investors have been collectively celebrating the fact that inflation has dipped within the target range for central banks, said Djataou.
“The big question is, where do we go from here?” she said.
The easy part for central banks is done, said Djataou, but that doesn’t mean the fight is over.
If the central banks’ target is really to get inflation back to two per cent, the question is how high rates need to be in order to achieve that target, she said. Adding to the difficulty are the fact that some of the things keeping inflation elevated, like oil prices, are outside the reach of the central banks.
Both the Bank of Canada and the Federal Reserve are set to make their next interest rate decisions in September. Regardless of whether they hike or hold, officials
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