sa国际传媒's main stock index retreated slightly on Thursday after hitting a 20-month high the day before, while a pair of reports held back growth in U.S. markets as well as north of the border.
The S&P/TSX composite index fell 86.53 points to close at 20,929.38.
鈥淥il is down a lot today,鈥� noted Jules Boudreau, a senior economist at Mackenzie Investments.聽
The 1.4 per cent drop in the energy index also hurt oil-linked currencies, including sa国际传媒鈥檚. The loonie traded for 75.69 cents US compared with 75.73 cents US on Wednesday.
Recently, the TSX has hit highs not seen since April 2022, "but it's still one of the worst-performing markets in December,鈥� Boudreau said, attributing sa国际传媒's relatively poor performance to the falling price of oil and the sturdy Canadian dollar.聽
鈥淚f you have a higher Canadian dollar, that will tend to be negative for the TSX.鈥澛�
Meanwhile, the three main U.S. indexes largely stayed put, weighed down by fresh figures indicating higher-than-expected unemployment as well as underwhelming home sales.
In New York, the Dow Jones industrial average gained 53.58 points to 37,710.10. The S&P 500 index nudged up by 1.77 points to 4,783.35, while the Nasdaq composite slipped 4.04 points to 15,095.14.
The number of Americans filing initial claims for unemployment benefits jumped by 12,000 to 218,000 in the week ended Dec. 23, the U.S. Labor Department reported on Thursday. Pending home sales south of the border remained at a two-decade low in November following a sharp decline the month before, according to the National Association of Realtors.聽
鈥淚 think that's driven a lot of what we saw in terms of low-growth price action,鈥� Boudreau said.聽
鈥淚n the U.S., the best sectors are utilities, consumer staples, communication. And then all of the cyclical stuff 鈥� energy, real estate 鈥� are down.鈥澛�
The weak numbers also had a ripple effect in sa国际传媒, he said.聽
鈥淭he markets outside of the U.S., including the TSX, which are more economically sensitive will tend to reflect the more bearish outlook.鈥澛�
A 鈥渧ery poor鈥� auction of seven-year Treasury Department notes on Thursday also came as a surprise, particularly in the light of the jobless and real estate numbers.聽
鈥淭ypically when you have a negative growth surprise like we saw because of initial jobless claims and home sales, you would tend to see treasuries and bonds in general rally. That's not what we saw today,鈥� Boudreau said.聽
鈥淭hat could be an indication that markets are starting to regurgitate some of the new bonds issued by the Treasury.鈥澛�
Across the Pacific, Chinese stocks made up some of the best performing markets globally after China鈥檚 central bank pledged to jump-start the economy. Wrapping up its quarterly monetary policy committee meeting Wednesday, the People鈥檚 Bank of China vowed to stimulate consumer prices following a steep three-month slide.
"That's going to be the big theme for me of 2024," Boudreau said. "Can the Chinese government and, relatedly, the Chinese central bank manage to really stimulate the Chinese economy 鈥� especially the Chinese consumer 鈥� to get China out of deflation and back to growth?"
In sa国际传媒, a key question hanging over the coming year is interest rate cuts.聽
鈥淚f we look at the economic numbers coming out of sa国际传媒 versus the U.S., they've been much weaker over the past month. Inflation has been a little bit more sticky here in sa国际传媒, but that'll converge to the U.S. numbers, especially when we're seeing that the Canadian economy is slowing down faster,鈥� Boudreau said.聽
He predicted as many as a half-dozen cuts from the Bank of sa国际传媒 in 2024.聽
Until January, however, market watchers and analysts may endure more 鈥渂oring鈥� days, stressing that the end of December typically sees 鈥渁mong the lowest-liquidity" trading days of the year.聽
On Thursday, the February crude oil contract was down US$2.34 at US$71.77 per barrel and the February natural gas contract was up 12 cents at US$2.56 per mmBTU.
The February gold contract was down US$9.60 at US$2,083.50 an ounce and the March copper contract was down almost four cents at US$3.92 a pound.
This report by The Canadian Press was first published Dec. 28, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Christopher Reynolds, The Canadian Press
