Five Days Left for Canadian Stocks to Recoup $97 Billion in August
Five Days Left for Canadian Stocks to Recoup $97 Billion in August
(Bloomberg) -- The countdown begins. With five trading days left to the end of August, Canada’s key stock benchmark is set for a loss -- in a month that’s typically up.
The S&P/TSX Composite Index slumped more than 2.2% as of Aug. 23, set for only its second monthly loss this year amid worsening trade tensions between the U.S. and China. More than 60% of companies listed on the benchmark have posted declines this month. Canadian stocks have been caught in the crosshairs of erratic market behavior and have lost a total of $97 billion of value.
On Monday morning, at least, bulls were back in charge, with the TSX climbing 0.7% as of 9:53 a.m. in Toronto. The picture brightened after U.S. President Donald Trump said the prospects for a deal with China were better now than at any time since negotiations began last year, even as a top state-media editor in Beijing questioned his version of events.
Market winds for the rest of the week will probably move with prospects for the fight between the world’s largest economies, and that will depend on whichever way Trump blows them.
“It’s ridiculous what’s going on out there,” Andrew McCreath, chief executive officer at Forge First Asset Management Inc., said Monday on BNN Bloomberg TV. “We were way down last night, we’re up decently this morning. All because Trump tweets away and meanwhile China doesn’t say very much.”
Other factors could intervene. In Canada, there’s still four of the Big 6 banks that have yet to report earnings and the week’s major economic data release -- quarterly GDP -- could have big implications for the Bank of Canada and local markets.
“Canada’s calendar is empty today but bank earnings and a single macro report plus a bond auction will mildly heat things up over the duration of the week,” Derek Holt, head of capital markets economics at Scotiabank, said in an Aug. 26 report.
Buckle up as volatility remains. Liquidity is lower than normal as many take the week off ahead of the Labor Day long weekend.
To contact the reporter on this story: Divya Balji in Toronto at dbalji1@bloomberg.net
To contact the editors responsible for this story: Madeleine Lim at mlim131@bloomberg.net, Steven Frank
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