TSX Hangs in There

Canada’s main stock index held its own by midday Monday, even though their cousins on Wall Street were pressured by worries over a spike in inflation after commodity prices jumped on vaccine-led recovery hopes.

The S&P/TSX Composite pushed higher 29.36 points to pause for lunch at 18,413.63.

The Canadian dollar slipped 0.06 cents to 79.30 cents U.S.

Just Energy tumbled 25% after the electricity and gas provider forecast a $250 million loss from the impact of winter storms sweeping across Texas and warned of its ability to continue as a going concern.

Cronos Group fell 3.3%, the most on the TSX, and the second biggest decliner was Ballard Power Systems, down 3.1%.

The largest percentage gainer on the TSX was Enerplus Corp, which jumped 6.2%, after multiple brokerages raised their price targets on the oil and gas company.

MEG Energy followed closely behind with a 5.6% rise after RBC upgraded shares of the energy company.

On a day without macroeconomic news, it was reported that Canadian banks are set to post their fourth straight year-on-year quarterly profit drop when they report results next week, the longest decline streak since the financial crisis, on margin compression and declining commercial lending, but flattening loan loss provisions signal a turning point.

ON BAYSTREET

The TSX Venture Exchange dropped 3.79 points midday Monday to 1,094.77.

Seven of the 12 TSX subgroups were negative by noon with health-care lower by 2%, information technology shedding 1.9%, and utilities off 1.5%.

The five gainers were led by energy, ahead 4.5%, gold, up 3%, and materials, surging 2.4%.

ON WALLSTREET

U.S. stocks fell on Monday as a continuous rise in bond yields dented the appetite for risk assets, particularly growth technology stocks.

The Dow Jones Industrials did make headway, however, grabbing 19.32 points to 31,513.69.

The S&P 500 dropped 20.84 points to 3,885.87,

The NASDAQ Composite retreated 226.19 points, or 1.6%, to 13,648.27.

Tesla shares lost 3% following a 4% decline last week. Big Tech stocks came under pressure as Apple, Amazon, Microsoft, Netflix and Alphabet all traded at least 1% lower.

All eyes will be on Federal Reserve Chairman Jerome Powell, who delivers his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday. His comments on rates and inflation could determine the market direction for the week.

On Monday, European Central Bank President Christine Lagarde said in a speech that the central bank is “closely monitoring the evolution of long-term nominal bond yields.” European sovereign bonds yields moved lower in response to her remarks.

The market is headed into the final week of February with solid gains. The Dow and the S&P 500 have risen more than 5% this month, while the NASDAQ has climbed 6.2%.

Airline stocks rebounded after Deutsche Bank upgraded several of the shares. American Airlines jumped more than 7%.

On the pandemic front, the White House said that it expects to ship out millions of delayed coronavirus vaccine doses this week after a sweeping winter storm disrupted logistics. Gov. Andrew Cuomo said on Sunday that a New York resident has tested positive for the COVID-19 variant first identified in South Africa.

Some equity investors grew concerned about rapidly rising Treasury yields in recent weeks as they could especially hurt high-growth companies reliant on easy borrowing while diminishing the relative appeal of stocks.

Prices for 10-Year Treasurys lost some ground, raising yields to 1.35% from Friday’s 1.34%. Treasury prices and yields move in opposite directions.

Oil prices gained $1.78 to $61.02 U.S. a barrel.

Gold prices raced ahead $33.00 to $1,810.40