TORONTO 鈥� sa国际传媒's main stock index lost more than one per cent on Wednesday in a broad-based slump and U.S. markets also fell, as stocks took a dramatic turn in the later half of the afternoon.
The sudden weakness didn鈥檛 seem to be sparked by a particular news event, said Kevin Burkett, portfolio manager at Victoria-based Burkett Asset Management.
But after an 鈥渋ncredible run鈥� for markets over the past couple of months as rate expectations shifted, investors are likely taking a cautious step back, he said.
鈥淭here鈥檚 a lot of nervousness around the rally of the last 30 days.鈥�
The S&P/TSX composite index closed down 238.82 points at 20,600.81.
In New York, the Dow Jones industrial average was down 475.92 points at 37,082.00. The S&P 500 index was down 70.02 points at 4,698.35, while the Nasdaq composite was down 225.28 points at 14,777.94.
Markets closed out their seventh straight winning week on Friday.
The U.S. Federal Reserve has continued to maintain a cautious front, Burkett said, even as markets are calling for more cuts than the central bank has said it expects to take.
鈥淢onetary policymakers don't want to show their hand because that diminishes the impact of the decisions they make at their meetings,鈥� he said.
Last week, the Fed announced it would hold its benchmark rate steady in the last policy announcement of 2023. The central bank also signalled it expects to make three cuts of a quarter-point in 2024.
The Bank of sa国际传媒 also recently held its key rate steady. In the summary of its deliberations released Wednesday, central bank officials agreed the odds of another hike have decreased with recent data pointing in the right direction.
The question in the U.S. and sa国际传媒 heading into 2024 isn鈥檛 really whether central banks will raise rates again, said Burkett.
鈥淭he question is, how quickly will they start cuts? And how deeply will they cut from here?鈥� he said.聽
New data in the U.S. showed consumer confidence improved in December, by more than economists expected. Sales of previously occupied homes in November also beat expectations.
Wednesday also saw some disappointing earnings reports from U.S. companies including FedEx.
The Canadian dollar traded for 75.01 cents UScompared with 74.94 cents US on Tuesday.
The February crude oil contract was up 28 cents at US$74.22 per barrel and the January natural gas contract was down five cents at US$2.45 per mmBTU.
The February gold contract was down US$4.40 at US$2,047.70 an ounceand the March copper contract was up a penny at US$3.91 a pound.
鈥� With files from The Associated Press
This report by The Canadian Press was first published Dec. 20, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)聽
Rosa Saba, The Canadian Press
