S&P/TSX composite down more than 100 points, U.S. stock markets rise
Canada’s main stock index closed down more than 100 points Monday on broad-based weakness, while U.S. stock markets rose after a day of mixed trading.
The S&P/TSX composite index closed down 117.03 points at 20,290.54.
Just as oil prices were the main reason for the TSX’s gains last week, energy and other commodities dragged the index down Monday, said Jules Boudreau, senior economist at Mackenzie Investments.
Commodities are pulling back mainly due to increasing worries over China’s economy, he said, affecting markets in Canada and the U.S.
In New York, the Dow Jones industrial average was up 26.23 points at 35,307.63. The S&P 500 index was up 25.67 points at 4,489.72,while the Nasdaq composite was up 143.48 points at 13,788.33.
Investors are eyeing fresh economic data Tuesday, said Boudreau _ inflation data in Canada, and retail sales in the U.S., two important markers for central banks as they prepare for their next interest rate decisions in September.
South of the border, retail sales “could end up being a real market mover,” he said.
There’s increasing confidence in the market that the big risks of a recession have passed, he said, because of the strength of the consumer, especially in the U.S.
“We’ve seen continued purchases, decent balances and bank accounts, really no sign that we’re going to get anything else than just a slow moderation in consumer spending,” he said. “But that’s led to very high or pretty high expectations for retail sales.”
If sales come in lower than those heightened hopes, it could lead to some pullback on growth expectations, said Boudreau.
Meanwhile, inflation in Canada will likely have risen due to higher energy prices, but core inflation will likely show continued signs of moderation,
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