TORONTO 鈥� sa国际传媒's main index moved lower Wednesday, led by weakness in base metals, while U.S. markets also continued to move down from last week's highs.聽
U.S. markets rose to record heights last week after another blowout earnings report from chipmaker Nvidia.
鈥淚 think you're just seeing things come a little bit off the highs, which is normal,鈥� said Allan Small, senior investment adviser at iA Private Wealth.聽
It鈥檚 far from a sell-off, though, said Small 鈥� investors are likely just trimming some profit.
The S&P/TSX composite index closed down 75.13 points at 21,243.77.
In New York, the Dow Jones industrial average was down 23.39 points at 38,949.02. The S&P 500 index was down 8.42 points at 5,069.76,while the Nasdaq composite was down 87.56 points at 15,947.74.
The U.S. economy grew 3.2 per cent from October through December, according to a report from the Commerce Department, a slight downgrade from its initial estimate.聽
The report was pretty much as expected, said Small.
鈥淥verall, there鈥檚 no mistake about it, the United States is growing,鈥� he said.
鈥淎nd they鈥檙e growing above what anyone would have expected at this time. And so that鈥檚 delaying the interest rate cuts.鈥澛�
But the more important report this week is tomorrow鈥檚 core PCE, the Fed鈥檚 preferred gauge of inflation, said Small.
The ongoing economic strength, while technically bad news for anyone hoping for rate cuts, is a 鈥渨in-win鈥� for investors, he said.
That鈥檚 because the U.S. Federal Reserve has plenty of room to cut rates if it becomes necessary, he said.
鈥淚f the market should falter at this juncture, and things should get worse really, really quickly ... then the Fed can cut rates.鈥�
The same is true of the Bank of sa国际传媒, said Small, though the economic picture is much weaker than it is south of the border.聽
鈥淚 think the slowdown is coming on both sides of the border, just we鈥檙e experiencing (it) much quicker than the U.S.,鈥� he said.聽
In sa国际传媒 this week, bank earnings are continuing to roll in, with RBC and National Bank reporting Wednesday.聽
Though earnings have been mixed among the banks so far, they have one thing in common, noted Small: they鈥檙e setting aside more money for bad debt, preparing for a weaker consumer.
The Canadian dollar traded for 73.67 cents UScompared with 73.96 cents US on Tuesday.
The April crude oil contract was down 33 cents at US$78.54 per barrel and the April natural gas contract was up eight cents at US$1.89 per mmBTU.
The April gold contract was down US$1.40 at US$2,042.70 an ounceand the May copper contract was down a penny at US$3.84 a pound.
鈥� With files from The Associated Press
This report by The Canadian Press was first published Feb. 28, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)聽
Rosa Saba, The Canadian Press
