Downward Journey for Stocks Continues

Canada’s main stock index slipped to one-month lows on Tuesday, as worries that existing COVID-19 vaccines may not hold up against the Omicron variant spooked markets, with a tumble in crude prices hammering heavy-weight oil stocks.

The S&P/TSX Composite shed 70.52 points to open Tuesday at 21,078.48.

The Canadian dollar was down 0.22 cents at 78.29 cents U.S.

Energy stocks got bruised the most during the first hour, as Birchcliff Energy took it on the chin 30 cents, or 4.3% to $6.69.

Gold stocks led the few gainers out there, primarily OceanaGold, gathering nine cents, or 3.8%, to $2.45.

Ottawa Public Health said late on Monday that two more cases of Omicron were detected in the nation’s capital, bringing Canada’s total number of cases to five.

The Bank of Canada will work with indigenous groups to understand the wounds caused by decades of discrimination and determine how reconciliation can create a more inclusive and prosperous economy for all, Governor Tiff Macklem said on Monday.

Government officials in British Columbia on Monday extended restrictions on the use of fuel by residents, saying it was needed for emergency vehicles as the region recovers from devastating floods.

On the economic slate, Statistics Canada said gross domestic product edged up 0.1% in September as growth in services-producing industries more than offset a decline in goods-producing industries.

ON BAYSTREET

The TSX Venture Exchange eked up 0.64 points to 954.90.

All but three of 12 TSX subgroups lost strength in the early going, with energy fading 1.7%, financials and real-estate each down 1%.

The three gainers were gold, surging 2.4%, materials, better by 1.3%, and industrials ahead 1.2%.

ON WALLSTREET

Stocks tumbled on Tuesday, reversing Monday’s rebound on Wall Street, as investors reassessed risks associated with the new omicron COVID variant.

The Dow Jones Industrials plummeted 297.08 points, to begin the day at 34,838.86, dragged down by losses in American Express and Coca-Cola.

The S&P 500 index docked 24.35 points to 4,630.92,

The NASDAQ ditched 1.39 points to 15,781.45.

Tuesday’s reversal came after Moderna CEO Stephane Bancel told the Financial Times that he expects existing vaccines to be less effective against the new variant. The CEO told the paper there could be a “material drop” in the current vaccines’ effectiveness against this variant. Bancel told reporters on Monday that it could take months to develop and ship an omicron-specific vaccine. Moderna was down nearly 4%.

Separately, Regeneron said its antibody treatment may have reduced effectiveness against omicron.

Travel shares, which led Friday’s drop and then gained on Monday, were taking hits once again on Tuesday. Expedia Group fell 2%, Norwegian Cruise Line Holdings tumbled 2% and American Airlines shares were off by 2.5%.

Bucking the broader market’s trend were some tech stocks. Stay-at-home stock Netflix rose 1.4%, Apple rallied 1% and Tesla gained 1.5%.

Tuesday marks the final trading day of November, which proved to be a confusing month for investors. The Dow is down about 2.7% in November. The S&P 500 is up 0.5% this month and the Nasdaq has rallied 1.7% in November.

Prices for 10-year Treasurys gained sharply, lowering yields to 1.42% from Monday’s 1.53%. Treasury prices and yields move in opposite directions.

Oil prices plunged $2.02 to $67.93 U.S. a barrel.

Gold prices vaulted $24.60 to $1,809.80 U.S. an ounce.

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