Canada’s main stock index made a subdued start to 2024, weighed down by a decline in financial stocks on Tuesday, though gains in commodity-linked shares capped losses.
The TSX Composite slipped 85.44 points to stop for lunch Tuesday at 20,873.
The Canadian dollar faded 0.39 cents to 75.11 cents U.S.
The benchmark index gained more than 8% in 2023 on optimism that the Bank of Canada will start cutting interest rates this year.
Money market participants are pricing in a more than 37% chance of the central bank to reduce borrowing costs by at least 25 basis points in March.
Heavyweight financial stocks fell, while the information technology index slipped after Shopify’s shares declined $4.28, or 4.2%, to $98.88. Shares of crypto firms Bitfarms Ltd rose six cents, or 1.6%, to $3.91, but Hut 8 Corp slumped 12 cents to $17.56. Bitcoin surged to a 21-month high.
On the economic calendar, the Markit Manufacturing PMI in Canada decreased to 45.4 points in December from 47.7 points in November.
ON BAYSTREET
The TSX Venture Exchange inched up 0.59 points to 553.49.
Eight of 12 subgroups gained ground early Tuesday, with gold better by 1%, energy stronger 0.9%, and materials higher 0.8%.
The four subgroups were weighed most by information technology, off 2.1%, financials, ducking 0.6%, and consumer staples, falling 0.4%.
ON WALLSTREET
The S&P 500 fell Tuesday, the first trading day of the year, as interest rates rebounded slightly and investors took some money off the table following a surprisingly strong 2023.
The Dow Jones Industrials recovered 49.79 points midday to 37,739.33.
The S&P 500 subtracted 21.21 points to 4,748.62.
The NASDAQ dwindled 194.25 points, or 1.3%, to 14,817.10.
Apple shares led the pullback after Barclays downgraded the member of the Magnificent 7 market leaders basket to an underweight rating. On the other hand, the Dow’s losses were contained as defensive stocks like Johnson & Johnson and Merck strengthened.
The stock market finished 2023 with a bang, as the S&P 500 climbed for nine weeks in a row to end the year, notching its best weekly win streak since 2004. Risk assets enjoyed a big relief rally as the economy remained resilient and inflation cooled, while the Federal Reserve signaled an end to rate hikes and forecasted rate cuts later this year. The market also endured a regional banking crisis as well as wars in Ukraine and the Middle East.
Technology shares, especially megacap stocks, led the 2023 advance with Apple soaring 48%, Microsoft surging nearly 57% and Nvidia skyrocketing 239%. The tech-heavy NASDAQ Composite ended the year up 43.4% for its best year since 2020.
That trend was reversing on Tuesday as the new year of trading began with those same stocks declining in early trading. Apple shares were down 2% after the negative call from Barclays. The firm said Apple could lose about 17% this year because of lackluster iPhone sales.
Microsoft and Nvidia shares were also in the red in early trading.
The blue-chip Dow logged a 13.7% gain and notched a new record during 2023. Part of that rally was helped by a turn in interest rates.
Prices for the 10-year Treasury slipped a mite, raising yields to 3.93% from Friday’s 3.95%. Treasury prices and yields move in opposite directions.
Oil prices decreased 90 cents to $70.78 U.S. a barrel.
Gold prices strengthened $3.80 to $2,075.60.