Grandparent scam: London, Ont., senior beats fraudsters not once, but twice
It was a typical Tuesday for Mabel Beharrell, 84, until she got the call that would turn her world upside down. Her teenaged grandson was in trouble and needed her help.
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.
It was a typical Tuesday for Mabel Beharrell, 84, until she got the call that would turn her world upside down. Her teenaged grandson was in trouble and needed her help.
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