TORONTO 鈥� sa国际传媒's main stock index eked out a gain Friday, helped by strength in energy and utilities, while U.S. markets were mixed.聽
鈥淚t鈥檚 been a tough week,鈥� said John Zechner, chairman and lead equity manager at J Zechner Associates, amid an 鈥渦gly month鈥� overall, led by concern about interest rates.聽
The S&P/TSX composite index closed up 6.16 points at 19,818.39.
In New York, the Dow Jones industrial average was up 25.83 points at 34,500.66. The S&P 500 index was down 0.65 points at 4,369.71, while the Nasdaq composite was down 26.16 points at 13,290.78.
鈥淢arkets got ahead of themselves. A lot of people were really buying into this whole soft landing scenario ... that growth will continue, that the interest rates won鈥檛 rise much further,鈥� Zechner said.聽
Now, bond yields are rising as investors swallow a bitter pill: rates are likely to stay higher for longer, he said, and expectations for rate cuts need to be pushed back further.
The U.S. Federal Reserve鈥檚 Jerome Powell is speaking next Friday at the Kansas City Fed's Jackson Hole Economic Policy Symposium, but will likely not surprise with his comments as he won鈥檛 want to tip his hand, said Zechner. After all, the central bank is also playing it by ear in many ways, eyeing each new piece of economic data ahead of its decision in September, he said.
The central bank will likely stay on the sidelines this time, but won鈥檛 want to take their foot off the brakes yet, he said.聽
鈥淭hey may not go a lot higher from here, but they鈥檙e not going down.鈥�
That鈥檚 why tech and growth stocks have felt the hurt this month as the narrow rally that headlined the first half of the year has now eased, said Zechner.
The market has also been weighed down by weakness in commodities over economic weakness in China and worries about global demand.
Though the U.S. earnings season is drawing to a close, next week鈥檚 report from Nvidia will be one to watch, said Zechner. In May, the company 鈥渄emolished鈥� earnings expectations and helped kick off a second surge in tech stocks fueled by optimism over artificial intelligence, he said, but this time, it may be a different story.聽
鈥淭hey'll probably have a pretty good quarter, but the expectations bar has gone way, way up,鈥� said Zechner.聽
The Canadian dollar traded for 73.79 cents US compared with 73.94 cents US on Thursday.
The October crude contract was up 76 cents at US$80.66 per barrel and the September natural gas contract was down seven cents at US$2.55 per mmBTU.
The December gold contract was up US$1.30 at US$1,916.50 an ounce and the September copper contract was up a cent at US$3.71 a pound.
This report by The Canadian Press was first published Aug. 18, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
