North American markets fall Friday, ending a volatile trading week

TORONTO -

North American markets ended the trading week in the red, with Canada's main stock index down more than 170 points and U.S. stock markets falling amid inflation worries and a stark warning from FedEx about worsening trends in the economy.

The S&P/TSX composite index was down 174.28 points at 19,385.88, dragged down by weakness in industrials, technology, energy and financials.

In New York, the Dow Jones industrial average was down 139.40 points at 30,822.42. The S&P 500 index was down 28.02 points at 3,873.33, while the Nasdaq composite was down 103.95 points at 11,448.40.

All the major U.S. indexes have now posted losses four out of the past five weeks.

FedEx saw its biggest single-day sell-off on record Friday, falling 21.4 per cent, after warning investors that profits for its fiscal first-quarter will likely fall short of forecasts because of a dropoff in business. The package delivery service is also shuttering storefronts and corporate offices and expects business conditions to further weaken.

“I think that FedEx's profit warning is kind of telling everybody the recession is here. And certainly if not in North America it certainly is in other parts of the world,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

Investors are going into the weekend concerned about the U.S. economy and are bracing for the U.S. Federal Reserve's interest rate decision next week, which is widely expected to be a 75 basis-point increase, although the possibility of a 100 basis-point hike is growing.

“I'm about 50/50 on that one. It really is a coin toss,” he said.

Cieszynski also expects interest rates to stay higher for longer.

“I think right now people still have this idea that rates will go up quickly and come down quickly. And I just don't think that's going to be the case,” he said.

Cieszynski really had his eye on the energy sector and the price of oil Friday, noting that the two have “decoupled a little bit.”

“Energy is actually down a little bit on a day when the oil price is actually up a little bit. And then we've seen the opposite of that this week as well. We've seen energy stocks up on on days when oil is down. So it's a funny thing,” he said.

“When you see them decouple as we have over the last few days, that suggests to me that there's a lot of confusion out there right now. I don't think people are quite sure which way things are heading.”

The Canadian dollar traded for 75.27 cents US compared with 75.76 cents US on Thursday.

Earlier in the day, the loonie fell to its lowest level in almost two years, exchanging hands at 75.15 cents US.

“As long as the U.S. dollar remains strong, the Canadian dollar is likely to continue to struggle against it. If something happens like the oil price taking off, then that might help us a bit,” he said.

“But it's important to remember that while Canada is struggling against the U.S. dollar, it's actually doing really well against pretty much everything else.”

The November crude contract was up 11 cents at US$84.76 per barrel and the October natural gas contract was down 56 cents at US$7.76 per mmBTU.

The December gold contract was up US$6.20 at US$1,683.50 an ounce and the December copper contract was up two cents at US$3.52 a pound.

This report by The Canadian Press was first published Sept. 16, 2022.

- With files from The Associated Press