TORONTO 鈥� sa国际传媒's main stock index fell 1.4 per cent Thursday, with broad losses led by base metals and technology, while U.S. stock markets also fell as drops in major tech stocks weighed on Wall Steet.
Earnings from Meta and Microsoft didn鈥檛 quite achieve investors鈥� lofty expectations, said Kevin Headland, chief investment strategist at Manulife Investment Management.
Tech stocks have had quite the run this year, driven by hype over artificial intelligence, and have often exceeded the high expectations set for them during earnings seasons. But even when investors get what they want, it doesn鈥檛 seem to be good enough, said Headland.
鈥淚t鈥檚 interesting how it鈥檚 not about meeting expectations, it鈥檚 about beating expectations,鈥� he said, adding that markets are 鈥減riced for perfection,鈥� particularly for mega-cap stocks.
The tech-heavy Nasdaq composite fell 512.78 points or 2.8 per cent at 18,095.15.
In New York, the Dow Jones industrial average was down 378.08 points or 0.9 per cent at 41,763.46, while the S&P 500 index was down 108.22 points or 1.9 per cent at 5,705.45.
The S&P/TSX composite index closed down 350.92 points at 24,156.87.
Both Meta and Microsoft reported profits that were better than forecast, but it still wasn鈥檛 enough: Microsoft鈥檚 estimate for its cloud computing business fell short of some expectations while Meta鈥檚 planned spending on AI worried others.
Markets are dissecting every detail, said Headland, and seemed uncertain about some of them.
鈥淭he expectations kept getting loftier and loftier, and it becomes harder and harder to meet and especially beat those expectations," he said.
Despite Thursday鈥檚 tech-led losses, in recent months the markets have shown signs of better breadth and depth, said Headland, which he said is a 鈥済ood news story.鈥�
The Personal Consumption Expenditures index, a measure of inflation the U.S. Federal Reserve watches, slowed in September to 2.1 per cent. The report was more or less as expected, said Headland.
Meanwhile north of the border, sa国际传媒鈥檚 economy stalled in August and GDP for the third quarter looks likely to fall short of the Bank of sa国际传媒鈥檚 estimates.
The report, though a little weaker than anticipated, wasn鈥檛 a huge surprise either, said Headland. The Bank of sa国际传媒 has one more interest rate decision later this year, and he thinks it鈥檚 possible they could announce a second supersize half-percentage-point cut as economic data continues to weaken.
鈥淚 would not be surprised ... if I saw another 50-basis-point cut, given inflation is lower than targeted,鈥� he said.
The Canadian dollar traded for 71.86 cents US, unchanged from Wednesday.
The December crude oil contract was up 65 cents at US$69.26 per barrel and the December natural gas contract was down 14 cents at US$2.71 per mmBTU.
The December gold contract was down US$51.50 at US$2,749.30 an ounce and the December copper contract was down a penny at US$4.34 a pound.
鈥� With files from The Associated Press
This report by The Canadian Press was first published Oct. 31, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
