TORONTO – A drop in commodities depressed the major Canadian equity index a day before heightened volatility associated with the quarterly expiration of options known as quadruple witching.
North American equity markets were weak at the start of the day, but partially recovered until the close.
âThere was a bit of anxiety before noon that the market (S&P 500) might break tech support below 4,450. But now we have recovered all of that, have calmed down and I think we could do it again tomorrow because that it’s Quad Witching, âsaid independent currency analyst Erik Bregar.
The morning “headfake” and the recovery that followed suggest that “a lot of people don’t make money today, they’re just trying to limit the losses,” Bregar said in an interview.
The S & P / TSX Composite Index closed 91.69 points lower at 20,602.10 after losing as much as 138.68 points in previous trades.
In New York, the Dow Jones Industrial Average lost 63.07 points to 34,751.32. The S&P 500 Index lost 6.95 points to 4,473.75, while the Nasdaq composite was up 20.39 points to 15,181.92.
Thursday’s first losses came even as US retail sales data beat expectations, rising 0.7%, from the expected 0.7% contraction due to the impact of the Delta variant.
The stock market fell after bond yields rose in response to retail sales figures.
It was followed by slightly lower unemployment figures in which the number of first jobless claims rose by 20,000 from a pandemic low to 332,000.
Bregar described the number as “a bit of a wash.”
He added that weak data in Canada, such as a 2.1% drop in wholesale trade in July from the previous month and housing starts down 3.9% in August from July, did not have much of an impact on the loonie.
It was relatively stable as crude oil prices were flat after hitting a six-week high mid-week.
The Canadian dollar was trading at 78.90 US cents against 79.05 US cents on Wednesday.
Bregar said investors could have taken the retail sales figures as a sign that the Federal Reserve’s cutting plans may be back for next week’s meeting.
“Hence the surge in yields, the drop in stocks, but I still feel the markets can’t really make up their mind here,” he said.
“It wouldn’t surprise me if we see more turbulence tomorrow, but overall it’s been a very hectic week and I think we’ll need the FOMC meeting to give us a little more directional bias.”
September has historically been a difficult month due to losses in the second half of the month.
The TSX is slightly higher so far in September as the US markets are down. Still, North American markets are up just under 20% for the year.
Materials trailed the day the most, losing 3% on falling gold and copper prices, prompting shares of Endeavor Silver Corp. and Oceanagold Corp. to decrease by 6.6 and 6.3% respectively.
The December gold contract was down US $ 38.10 to US $ 1,756.70 per ounce and the December copper contract was down 12.5 cents to US $ 4.28 per ounce. delivered.
Energy also fell, although crude oil prices remained stable, Crescent Point Energy Corp. having lost 4.9 percent.
The October crude oil contract was unchanged at US $ 72.61 per barrel and the October natural gas contract was down 12.5 cents to US $ 5.34 per mmBTU.
Four sectors were up slightly that day, including technology.
This report by The Canadian Press was first published on September 16, 2021.