Rising COVID-19 infections in the U.S. push stock markets lower to end week

Rising COVID-19 infections in the U.S. push stock markets lower to end week

TORONTO — North American stock markets capped a poor weak by moving sharply lower Friday on rising COVID-19 infections in the U.S.

New coronavirus cases in the United States hit a record high, raising investor concerns about the pace of the economic recovery. Rates were so high in Texas and Florida that their Republican governors backed down on loosening restrictions.

“When you hear headlines like we’re shutting things back down … that just brings back a risk-off tone,” said Erik Bregar, head of currency strategy at the Exchange Bank of Canada.

Equity markets have largely ignored infection rates as investors pinned their hopes on a rapid, so-called V-shaped recovery that Bregar said has been trumpeted by the “Wall Street machine” through the financial media.

Bond markets, however, have been more dubious. The 10-year U.S. Treasury yield was 0.68 per cent Friday.

“It’s just saying to me that there’s still a very bumpy road ahead,” Bregar said in an interview, adding the central banks will face growing pressure to deliver negative interest rates.

“I feel like if you’re looking for reality, bonds have everything priced in correctly in my opinion.”

If there was really going to be a V-shaped recovery coming, the 10-year Treasury would be above 1.5 per cent, he added.

The focus on infection rates seemed to neutralize a record 8.2 per cent increase in consumer spending in May.

The S&P/TSX composite index closed down 257.16 points at 15,188.98. It fell 1.8 per cent over the past week.

In New York, the Dow Jones industrial average was down 730.05 points at 25,015.55. The S&P 500 index was down 74.71 points at 3,009.05, while the Nasdaq composite was down 259.78 points at 9,757.22.

The Canadian dollar traded for 73.12 cents US compared with 73.29 cents US on Thursday and 73.99 on Tuesday afternoon.

“Since Tuesday morning the Canadian dollar has been weaker on a broad U.S. dollar safe-haven bid,” Bregar said.

Materials was the lone of 11 major sectors on the TSX to move higher. It gained 0.37 per cent on higher gold prices as B2Gold Corp. and Kinross Gold Inc. each gained about 3.3 per cent.

The August gold contract was up US$9.70 at US$1,780.30 an ounce and the September copper contract was up 0.1 of a cent at nearly US$2.68 a pound.

Health care fell the most at 3.9 per cent, followed by utilities, financials and energy.

The Bank of Montreal lost 4.1 per cent as the heavyweight financials moved lower. The decline came in response to the Federal Reserve on Thursday limiting dividend payments and barring share repurchases until at least the fourth quarter following its annual stress test.

Energy was down 2.5 per cent with Shawcor Ltd., Frontera Energy Corp. and Vermilion Energy Inc. off 11.8, eight and 7.2 per cent respectively.

The August crude contract was down 23 cents at US$38.49 per barrel and the August natural gas contract was down 0.2 of a cent at US$1.54 per mmBTU.

This report by The Canadian Press was first published June 26, 2020.

Companies in this story: (TSX:BTO, TSX:K, TSXSCL, TSX:FEC, TSX:VET, TSX:GSPTSE, TSX:CADUSD=X)

Ross Marowits, The Canadian Press

Business

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

Just Posted

Alberta has 3,651 active cases of COVID-19. (File photo)
432 new COVID cases sets another record Friday

Central zone holds steady at 126 active cases

The future site of the Rimbey Travel Centre. Web photo
New Rimbey development aims to capitalize on highway traffic

Phase I of the Rimbey Travel Centre would be along Hwy. 20, if approved

"We are looking seriously at the spread and determining what our next steps should be," says Alberta’s chief medical officer of health, Dr. Deena Hinshaw, as the daily number of COVID-19 cases continues to climb.
427 new COVID cases is highest in Alberta ever

Central zone has 126 active cases of COVID-19

soup
Rimbey FCSS to introduce the Cultural Community Kitchen

The Cultural Community Kitchen sessions will be held at the Rimbey Co-op

robbery
UPDATE: Shooting suspect arrested by Wetaskiwin/Camrose RCMP

Rimbey RCMP had responded to a complaint of an armed robbery at the Bluffton City General Store

B.C. Liberal leader Andrew Wilkinson, B.C. NDP leader John Horgan and B.C. Greens leader Sonia Furstenau. (Black Press Media)
VIDEO: One day until B.C. voters go to the polls in snap election defined by pandemic

NDP Leader John Horgan’s decision to call an election comes more than a year ahead of schedule and during a pandemic

This photo provided by Air Force Reserve shows a sky view of Hurricane Epsilon taken by Air Force Reserve hurricane hunter team over the Atlantic Ocean taken Wednesday, Oct. 21, 2020.   Epsilon’s maximum sustained winds have dropped slightly as it prepares to sideswipe Bermuda on a path over the Atlantic Ocean.  The National Hurricane Center says it should come close enough Thursday, Oct. 22, evening to merit a tropical storm warning for the island.  (Air Force Reserve via AP)
Hurricane Epsilon expected to remain offshore but will push waves at Atlantic Canada

Epsilon is not expected to have any real impact on land

A voter places her absentee ballot in the ballot box, Wednesday, Oct. 7, 2020, at Merrill Auditorium in Portland, Maine. THE CANADIAN PRESS/AP/Robert F. Bukaty
American voters living in Canada increasingly being counted in presidential race

The largest number of Canadian-based American voters cast their ballots in New York and California

A composite image of three photographs shows BC NDP Leader John Horgan, left, in Coquitlam, B.C., on Sept. 25, 2020; BC Green Party Leader Sonia Furstenau, centre, in Victoria on Sept. 24, 2020; and BC Liberal Party Leader Andrew Wilkinson Pitt Meadows, B.C., on Sept. 24, 2020. THE CANADIAN PRESS/Darryl Dyck, Chad Hipolito
British Columbia votes in snap election called during COVID-19 pandemic

NDP Leader John Horgan called the snap election one year before the fixed voting date

Nunavut's provincial flag flies on a flag pole in Ottawa, on Tuesday June 30, 2020. The annual report from Nunavut's representative for children and youth says "complacency and a lack of accountability" in the territory's public service means basic information about young people needing services isn’t tracked. THE CANADIAN PRESS/Adrian Wyld
Nunavut’s young people ‘should be expecting more’ from government services: advocate

‘The majority of information we requested is not tracked or was not provided by departments’

Ryen Williams, 11, with a lost miniature horse at JJ Collett Oct. 23. Photo by Don Williams
UPDATE: Owners found

Father and son found him while out for a walk at JJ Collett

A Le Chateau retail store is shown in Montreal on Wednesday July 13, 2016. Le Chateau Inc. says it is seeking court protection from creditors under the Companies’ Creditors Arrangement Act to allow it to liquidate its assets and wind down its operations.THE CANADIAN PRESS/Ryan Remiorz
Clothing retailer Le Chateau plans to close its doors, files for CCAA protection

Le Chateau said it intends to remain fully operational as it liquidates its 123 stores

U.S. border officers at the Peace Arch crossing arrested two men on California warrants this week. (File photo)
Ottawa predicts system delays, backlogs unless court extends life of refugee pact

Canada and the United States recognize each other as safe places to seek protection

Conservative member of Parliament Michelle Rempel Garner, left to right, Conservative Leader Erin O’Toole and Conservative Deputy Leader Candice Bergen arrive to hold a press conference in Ottawa on Thursday, Oct. 22, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No-confidence showdown over sweeping Tory motion on government handling of pandemic

The Conservative motion is to be put to a vote Monday and has the support of both the Bloc Québécois and NDP

Most Read