NEW From yearning for a change to cost of living, why some Canadians have left or may leave the country
For some immigrants, their dreams of permanently settling in Canada have taken an unexpected twist.
Waning consumer confidence and Fed warnings about interest rate hikes pushed North American stock markets lower ahead of data Wednesday that could confirm the U.S. is in a technical recession.
After getting off to a positive start, markets floundered after two Federal Reserve members burst the bubble of investors who thought weaker economic data could prompt the central bank to pull its foot off the pedal of aggressive rate hikes.
New York Fed president John Williams and San Francisco Fed president Mary Daly said Tuesday that the central bank is committed to fully tackling inflation.
The tone wasn't new, but there was a break in the use of that language over the past couple of days that prompted risk assets to bounce, said Mike Archibald, vice-president and portfolio manager with AGF Investments Inc.
“So now you're getting pressure today on kind of the long duration assets, the growthier parts of the market, so technology and consumer discretionary, and communication services,” he said in an interview.
Analysts are forecasting the U.S. economy will be negative 1.5 per cent in the second quarter, following a 1.5 per cent drop on an annualized basis in the first quarter. Together, that constitutes a recession with two consecutive quarters of negative growth.
“A more significant drawdown for sure is the concern and obviously you've seen the impact of that on certain risk assets,” Archibald said.
“We need to get closer to the point in time where we feel confident that the Fed has done their interest rate hiking cycle and I don't think we're anywhere near that yet. So that's likely going to mean there's gonna be further volatility in the market.”
On top of commentary from Fed speakers, consumer confidence data was weaker than expected.
The Conference Board said the consumer confidence index fell to a reading of 98.7 in June, down from 103.2 in May to the lowest level since before the COVID-19 pandemic.
The pessimism comes amid high inflation and fears that aggressive interest rate hikes will throw the economy into a full-blown recession.
The S&P/TSX composite index closed down 35.58 points to 19,222.74, snapping a two-day rally.
In New York, the Dow Jones industrial average was down 491.27 points at 30,946.99. The S&P 500 index was down 78.56 points at 3,821.55, while the Nasdaq composite was down 343.01 points or three per cent at 11,181.54.
Partially offsetting the negative news was a relaxing of China's COVID-19 restrictions for inbound travellers, with quarantines being cut by half to seven days.
That gave travel companies an early lift, with Air Canada shares rising as much as 5.7 per cent. However the enthusiasm dissipated with the country's largest airline ending the day up one per cent.
“Clearly there's still some skittishness in this marketplace just in general,” said Archibald.
“We're in a bear market and so bear market bounces are vicious usually to the upside, and we've seen that the last four or five days. And perhaps we've seen now the peak short term and maybe we're going to have more volatility to the downside here.”
Technology was the weakest sector. It took a hit amid higher bond yields with Hut 8 Mining Corp. down 9.1 per cent while Lightspeed Commerce Inc. and Shopify Inc. were off 7.0 and 6.1 per cent respectively.
Materials was also lower as bullion prices fell.
The August gold contract was down US$3.60 at US$1,821.20 an ounce and the September copper contract was up 1.4 cents at US$3.78 a pound.
Energy was the biggest winner on the day. It climbed 4.2 per cent as crude oil prices increased two per cent after the G7 released its plan to cap Russian oil exports or put price limits on it.
“Clearly there's still a push to put in punitive measures against Russia. The oil market today is obviously taking this as positive. And certainly you're seeing big, big moves up in the energy space. It's by far the leader on the board today.”
The August crude oil contract was up US$2.19 at US$111.76 per barrel and the August natural gas contract was up 2.4 cents at US$6.57 per mmBTU.
Shares of Arc Resources Ltd. increased 8.8 per cent.
The Canadian dollar traded for 77.74 cents US compared with 77.60 cents US on Monday.
This report by The Canadian Press was first published June 28, 2022.
For some immigrants, their dreams of permanently settling in Canada have taken an unexpected twist.
Studies have shown that ultraprocessed foods can have a detrimental impact on health. But 30 years of research show they don’t all have the same impact.
Forging ahead with increasing Canada's capital gains inclusion rate 'sows division,' and is a 'shortsighted' way to improve the deficit, business groups are warning Finance Minister Chrystia Freeland.
An Ontario man considering having his driveway paved received a quote from a company for $7,000, but then, another paver in the neighbourhood knocked on his door and offered half that rate.
Stormy Daniels will return to the witness stand Thursday in Donald Trump's hush money trial as the defence tries to undermine the credibility of the porn actor's salacious testimony about their alleged sexual encounter and the money she was paid to keep quiet.
Amid evidence of rising breast cancer rates among young women in Canada, one Toronto startup is offering a contactless and radiation-free device that can help doctors identify suspicious changes in breast tissue. The company, Linda Lifetech, says this can lead to earlier detection of breast cancer.
Forecasters warned a wave of dangerous storms in the U.S. could wash over parts of the South early Thursday, a day after severe weather with damaging tornadoes and large hail killed at least three people in the region.
Toronto police say a man was taken into custody outside Drake's Bridle Path mansion Wednesday afternoon after he tried to gain access to the residence.
There is currently a whooping cough epidemic in Europe, with 10 times as many cases compared to the previous two years. While an outbreak has not been declared nationwide in Canada, whooping cough is regularly detected in the country.
The stakes have been set for a bet between Vancouver and Edmonton's mayors on who will win Round 2 of the Stanley Cup playoffs.
A grieving mother is hosting a helmet drive in the hopes of protecting children on Manitoba First Nations from a similar tragedy that killed her daughter.
A chicken farmer near Mattawa made an 'eggstraordinary' find Friday morning when she discovered one of her hens laid an egg close to three times the size of an average large chicken egg.
A P.E.I. lighthouse and a New Brunswick river are being honoured in a Canada Post series.
An Ontario man says he paid more than $7,700 for a luxury villa he found on a popular travel website -- but the listing was fake.
Whether passionate about Poirot or hungry for Holmes, Winnipeg mystery obsessives have had a local haunt for over 30 years in which to search out their latest page-turners.
Eighty-two-year-old Susan Neufeldt and 90-year-old Ulrich Richter are no spring chickens, but their love blossomed over the weekend with their wedding at Pine View Manor just outside of Rosthern.
Alberta Ballet's double-bill production of 'Der Wolf' and 'The Rite of Spring' marks not only its final show of the season, but the last production for twin sisters Alexandra and Jennifer Gibson.
A mother goose and her goslings caused a bit of a traffic jam on a busy stretch of the Trans-Canada Highway near Vancouver Saturday.