Toronto market falls to end a strong April and partially recover March weakness

Toronto market falls to end a strong April and partially recover March weakness

Toronto market falls to end a strong April and partially recover March weakness

TORONTO — Canada’s main stock index ended lower to cap one of its best months in years and partially recover the steep declines of March.

The S&P/TSX composite index closed down 447.37 points or nearly three per cent at 14,780.74.

The loss ended a four-day winning streak that feels like a bit of a pause after Wednesday’s gains, said Greg Taylor, chief investment officer of Purpose Investments.

“Yesterday was really like a perfect storm of good news,” he said, pointing to positive sentiment about the economy reopening and a potential treatment for the novel coronavirus.

“And I think today’s more just sober second thoughts, people are wondering if they got too euphoric yesterday.”

In New York, the Dow Jones industrial average was down 288.14 points at 24,345.72. The S&P 500 index was down 27.08 points at 2,912.43, while the Nasdaq composite was down 25.16 points at 8,889.55.

North American stock markets had one of their best performances in years last month.

The TSX gained 10.5 per cent after losing 17.7 per cent in March. That leaves it 17.8 per cent below its Feb. 20 record high.

While equity markets have bounced back there’s no real optimism in the bond market with 10-year U.S. treasuries not recovering much. That’s a big disconnect that has people wondering why the bond market isn’t responding, said Taylor.

He said stock markets mainly overlooked weak U.S. jobless numbers, lower consumer spending and an unwillingness of the European Central Bank to do more quantitative easing.

“No one’s expecting the data to improve right now because this is kind of the eye of the storm. But it better start to improve in the next month or two to justify the bounce back in the equity markets.”

There was also some speculation Thursday that the White House would start putting on tariffs or ratcheting tensions with China as they tried to seek retribution for the virus.

“That would be a fairly big negative for the market if trade tensions started to heighten up and we just don’t need that as we’re still dealing with the other stages of recovery.”

All 11 major sectors of the TSX were lower with materials, financials and health care leading the way.

Materials lost 3.7 per cent as metals dropped partly on weak economic data out of China. Wesdome Gold Mines Ltd. and Silvercorp Metals Inc. were each down about eight per cent.

The June gold contract was down US$19.20 at US$1,694.20 an ounce and the July copper contract was down 2.65 cents at US$2.34 a pound.

The heavyweight financials sector fell 3.5 per cent as Bank of Montreal and National Bank of Canada dipped 5.4 and 4.9 per cent respectively.

Cannabis producers Canopy Growth Corp. led health care lower while energy was down 2.2 per cent despite higher crude oil prices as Suncor Energy Inc. lost 6.2 per cent.

The June crude contract was up US$3.78 or 25 per cent at US$18.84 per barrel and the June natural gas contract was up eight cents at US$1.95 per mmBTU.

Crude is up nearly 63 per cent from last week’s lows but is still down nearly 70 per cent since January as economies have shut down to slow the spread of COVID-19 and Russia and Saudi Arabia engaged in a price war.

Despite the recent gains, Canadian oil producers are cutting output as no one’s making money at current prices.

The Canadian dollar traded for 71.89 cents US compared with an average of 71.83 cents US on Wednesday.

Taylor said the real risk for markets will be in the fall once the economy starts to normalize and optimism will be heightened for a healthy second-half recovery.

“If things start to open up and the economy doesn’t rebound as fast as everyone thinks, the earnings are really sluggish… I think that could be the big risk that causes a retest of those lows.”

This report by The Canadian Press was first published April 30, 2020.


Ross Marowits, The Canadian Press


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)
750 new COVID-19 cases identified in Alberta Sunday

Central zone currently has 1,182 active cases of the virus

The Pfizer-BioNTech vaccine deliveres to Canada are being delayed because of complications at their European distribution facility. THE CANADIAN PRESS/Nathan Denette
Delays of Pfizer vaccine delivery to impact Alberta’s vaccination plans

Alberta has administered 74,000 doses of the COVID-19 vaccine so far

Bentley Blessing Pantry continues to faithfully serve the community

‘We just wanted to make everyone aware that we are still here to serve you throughout this coming year.’

A scene from “Canada and the Gulf War: In their own words,” a video by The Memory Project, a program of Historica Canada, is shown in this undated illustration. THE CANADIAN PRESS/HO - Historica Canada
New video marks Canada’s contributions to first Gulf War on 30th anniversary

Veterans Affairs Canada says around 4,500 Canadian military personnel served during the war

Conservative Leader Erin O’Toole holds a press conference on Parliament Hill, in Ottawa on December 10, 2020. THE CANADIAN PRESS/Sean Kilpatrick
No place for ‘far right’ in Conservative Party, Erin O’Toole says

O’Toole condemned the Capitol attack as ‘horrifying’ and sought to distance himself and the Tories from Trumpism

A passer by walks in High Park, in Toronto, Thursday, Jan. 14, 2021. This workweek will kick off with what’s fabled to be the most depressing day of the year, during one of the darkest eras in recent history. THE CANADIAN PRESS/Chris Young
‘Blue Monday’ getting you down? Exercise may be the cure, say experts

Many jurisdictions are tightening restrictions to curb soaring COVID-19 case counts

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
COVID-19: Provinces work on revised plans as Pfizer-BioNTech shipments to slow down

Anita Anand said she understands and shares Canadians’ concerns about the drug company’s decision

Prime Minister Justin Trudeau listens to a question during a news conference outside Rideau cottage in Ottawa, Friday, January 8, 2021. THE CANADIAN PRESS/Adrian Wyld
Trudeau says Canada’s COVID vaccine plan on track despite Pfizer cutting back deliveries

Canadian officials say country will still likely receive four million doses by the end of March

(Via the Canadian Press)
Alberta monolith comes with message to save eastern slopes of Rocky Mountains

‘They deserve our attention. They warrant our protection. They are under threat’

A Suncor logo is shown at the company’s annual meeting in Calgary on May 2, 2019. A worker is missing after a dozer broke through ice on an inactive Suncor tailings pond in northern Alberta.THE CANADIAN PRESS/Jeff McIntosh
Worker missing after dozer breaks through frozen tailings pond in northern Alberta

The worker was an employee of Christina River Construction

File Photo
‘You took away some real joy,’ Sylvan Lake Winter Village turned off after vandalism

Sometime during the night of Jan, 12 the light display at the pier was vandalized and damaged

Most Read