While U.S. stock markets were mixed on Thursday, Shopify Inc.-led gains in technology stocks following its agreement to assist merchants in integrating with Amazon.com Inc. couldn’t stop a little decline in Canada’s main stock index.
According to Brian Madden, chief investment officer at First Avenue Investment Counsel, the markets took some “pretty modest action” on Thursday.
It contrasts with the rise from the first three days of this week and the significant sell-off throughout August, he noted.
At 20,292.62, the S&P/TSX composite index was down 37.70 points, but shares of Shopify were up over 11%.
The Dow Jones industrial average in New York fell 168.33 points to 34,721.91. The Nasdaq composite was up 15.66 points at 14,034.97, while the S&P 500 index was down 7.21 points at 4,507.66.
According to Madden, there are opposing forces pulling on the Canadian markets. The last significant Canadian bank to publish results this quarter, CIBC, had “standout weakness” in its stock, he said, with its shares falling more than three percent, as its earnings fell short of expectations.
Overall, Madden claimed that the more cyclical sectors of the market—such as real estate, finance, and industrials—dragged the TSX lower.
On the other hand, he added, Shopify was having a great day on Thursday after learning that it had a deal with Amazon.
The markets this week were initially upbeat on a number of news that added to optimism the economy was cooling under the weight of increasing interest rates. This week is a big one for economic data, particularly in the U.S.
The government announced on Thursday that a key inflation indicator that the central bank constantly monitors remained low in December.
The non-farm payrolls report, which is predicted to show weakness, will be the “show stopper” to close the week on Friday, according to Madden. It will be followed by the Institute for Supply Management manufacturing survey. On Friday, Canada will receive updated GDP numbers.
According to Madden, this week will bring an end to a tumultuous month that was primarily marked by widespread weakness despite the current rally.
September brings interest rate decisions from the Bank of Canada and the Federal Reserve, both of which are anticipated to maintain current benchmark rates.
also gaining The news that the US is thinking about reclassifying cannabis from a schedule one substance to a schedule three substance caused cannabis stocks to spike on Thursday.
“They don’t move the market much because these (stocks) are a shadow of their former selves,” said Madden, but the industry is still worth monitoring.
The Canadian dollar was valued at 73.90 US cents, up from 73.88 US cents on Wednesday.
The October natural gas contract was down three cents at US$2.77 per mmBTU while the October oil contract was up US$2.00 at US$83.63 a barrel.
The December copper contract was down two cents at US$3.82 per pound while the December gold contract was down US$7.10 at US$1,965.90 per ounce.