TORONTO — Losses in the energy sector weighed Canada's main stock index down Friday, while U.S. markets were mixed, pulled lower by tech.
The S&P/TSX composite index closed down 91.18 points at 20,515.24.
In New York, the Dow Jones industrial average was up 129.84 points at 33,826.69. The S&P 500 index was down 11.32 points at 4,079.09,while the Nasdaq composite was down 68.56 points at 11,787.27.
Tech was the main downward driver on the markets in the U.S., while in Canada the resource-heavy TSX was affected by a drop in energy stocks, said Brian Madden, chief investment officer with First Avenue Investment Counsel.
The TSX’s energy index was down 3.49 per cent Friday, with some of the biggest energy companies on the index helping weigh it down.
Friday’s weakness was a continuation of a pullback that began a day earlier, said Madden, as some of the optimism investors had in central banks potentially cutting rates by the end of the year was squeezed out by a string of hotter-than-expected economic data.
After inflation, jobs and retail sales all showed the economy is proving tougher than expected to slow down, Thursday’s producer price data came in higher than expected, helping cement that outlook, Madden said.
“Tremors rippled through the market when that PPI number (came out) yesterday,” he said.
“What's inflationary to a producer ultimately gets passed along in wholesale pricing and eventually becomes inflation to the consumer.”
Central bank officials in both Canada and the U.S. have made it clear that if the economic data supports it, they will continue to hike interest rates, even though Canada’s central bank recently signalled it’s pausing to let the effects of hikes work their way through the market.
Investors had been pricing in up to two cuts by the end of the year, but those expectations have since waned considerably.
However, some of the strong economic data is also fuelling cautious optimism that a recession might not be necessary to cool inflation.
The Canadian dollar traded for 74.15 cents US compared with 74.41 cents US on Thursday.
The April crude oil contract was down $2.19 cents at US$76.55 per barrel and the March natural gas contract was down 11 cents at US$2.28 per mmBTU.
The April gold contract was down US$1.60 at US$1,850.20 an ounce and the March copper contract was down almost three cents at US$4.11 a pound.
This report by The Canadian Press was first published Feb. 16, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
