Jon Erlichman from BNN Bloomberg gives an update on how the stock markets in North America are expected to perform today.
Canadian stocks took a steep dive at the opening bell on Tuesday as the Toronto Stock Exchange (TSX) and other Canadian trading venues reopened after a public holiday. This drop was a delayed response to a global market selloff that occurred on Monday.
At the opening in Toronto, the S&P/TSX Composite Index plunged by up to 2.6%, extending its losing streak to three consecutive trading days. However, by 11:16 a.m., the index had recovered slightly, showing a loss of 1.4%. For every stock that gained, four were falling. This downturn marked the worst three-day stretch for Canadian equities since October 2022.
Among the biggest losers were major Canadian companies like Shopify Inc., Royal Bank of Canada, Brookfield Corp., and Enbridge Inc. These declines mirrored the substantial losses experienced by their U.S.-listed shares on Monday, in sync with a surge in market volatility and the broader global selloff.
Craig Basinger, Chief Market Strategist at Purpose Investments, noted in a Monday message to clients that the firm had taken advantage of the market dip to buy into its multi-asset portfolios. He described the selloff as "mechanical," suggesting that it led to a "mispricing of assets" and presented a buying opportunity.
Tuesday's losses were compounded by a further decline in gold prices, which had already dropped on Monday. Gold mining companies, including SSR Mining Inc. and Lundin Gold Inc., were among the hardest hit.
Despite the overall downturn, there might be a positive outlook for TSX-listed stocks. Bloomberg Intelligence equity strategist Gillian Wolff pointed out that Monday’s selloff seemed to signal a shift from tech stocks to more stable alternatives. Historically, the TSX tends to outperform U.S. markets during such transitions. Wolff also mentioned that the Canadian market's relatively low exposure to tech and AI could be advantageous in the short term as investors adjust to this shift.
Just last week, the S&P/TSX Composite Index hit a new high, surpassing 23,000 points for the first time.
