TORONTO 鈥� sa国际传媒's main stock index was down more than 100 points Thursday amid broad-based losses, while U.S. markets were also down as uncertainty continued to grip the regional banking sector south of the border.聽
Turmoil in the U.S. regional banking sector weighed on markets, with more bad news for the industry as Toronto-Dominion Bank announced it would no longer buy First Horizon Corp.聽
The S&P/TSX composite index was down 116.49 points at 20,238.19, with losses in the major sectors outweighing a 23 per cent boost in Shopify Inc. stock after the company announced more job cuts and a sale of its logistics business.聽
In New York, the Dow Jones industrial average was down 286.50 points at 33,127.74. The S&P 500 index was down 29.53 points at 4,061.22, while the Nasdaq composite was down 58.93 points at 11,966.40.
Continued rate increases, most recently from the Federal Reserve Wednesday and the European Central Bank Thursday, are contributing to a 鈥渢ough environment鈥� for regional banks, said Anish Chopra, managing director with Portfolio Management Corp.
Concerns about the survival of regional banks have been driving markets all week, said Chopra: 鈥淚t鈥檚 an issue that hasn鈥檛 gone away.鈥�
Markets are still pricing in rate cuts later this year, but Chopra said their expectations aren鈥檛 squaring with what central banks are doing or saying.聽
On Wednesday the Fed made clear that inflation has not yet been vanquished, while on Thursday Bank of sa国际传媒 governor Tiff Macklem spoke of 鈥渟taying the course鈥� in the central bank鈥檚 efforts to get back to a two per cent target for inflation.聽
鈥淚t's hard to see the central banks cutting rates anytime soon,鈥� said Chopra.聽
Meanwhile, investors have been flocking to a safe haven in gold, sending the price back up around record highs, a trend that could continue if uncertainty persists, Chopra said. The June gold contract was up US$18.70 at US$2,055.70 an ounce on Thursday.聽
That鈥檚 in stark contrast to crude, which remained below US$70 a barrel Thursday, weighed down by economic uncertainty and recession fears, Chopra said.聽
The June crude contract was down four cents at US$68.56 per barreland the June natural gas contract was down seven cents at US$2.10 per mmBTU.
The Canadian dollar traded for 73.71 cents UScompared with 73.44 cents US on Wednesday.
The July copper contract was up two cents at US$3.86 a pound.
This report by The Canadian Press was first published May 4, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
