Loonie slips, markets extend decline with another day of losses

TORONTO -- Hopes for a reprieve on North American stock markets were dashed Friday in another dismal session that capped off a turbulent start to the year.

See Full Article

Toronto's S&P/TSX composite index was down 2.76 points at 12,445.45, a relatively flat close that marked the eighth consecutive day of declines that left it more than 20 per cent below its all-time high set in September 2014. A drop of that magnitude is generally considered to signal a bear market.

The TSX has lost 4.3 per cent of its value since the start of the week and the beginning of 2016 -- with a precipitous drop in key commodities like oil and gold making the biggest dent.

Wall Street declines were even steeper on Friday as U.S. markets wrapped up their worst week since 2011.

The Dow Jones ended down 167.65 points at 16,346.45 while the broader S&P 500 slipped 21.06 points to 1,922.03 and the Nasdaq dropped 45.80 points to 4,643.63.

A lot has happened since traders ushered in the new year with hopes of moving past 2015, which was accented by falling oil prices and a sour outlook for Canada's economy.

But optimism quickly evaporated when China's new circuit breaker kicked in early Monday after the Shanghai index plunged seven per cent. While the mechanism was intended to avert further falls, it also appeared to send global stock markets into a panic as traders shifted their positions in anticipation of other surprises.

Matters only worsened by Thursday when a surprise move by China's central bank to adjust its currency rate did little to calm fears, and the market dropped again, causing the local regulator to suspend the circuit breaker.

China's main indexes finally moved higher on Friday, though it didn't seem to be enough to resurrect positivity in North America.

"Right now in the marketplace there's a lot of 'Sell first, ask questions later,"' said Kevin Headland, director of capital markets and strategy at Manulife Asset Management.

The Canadian dollar was down 0.26 of a cent at 70.68 cents U.S. as it continued to plumb depths not seen since July 2003.

In the latest sign of a strengthening American economy, the U.S. Labor Department reported Friday that employers added 292,000 jobs in December, far more than analysts forecast. Canada added about 22,800 jobs in December, though that was fuelled by part-time work.

On the TSX, the energy sector inched up 0.2 per cent, even as the February crude contract lost 11 cents to US$33.16 a barrel -- settling down more than 10 per cent on the week.

"We're trying to find a base in oil prices -- where that base is, I don't think anyone really knows," said Headland.

"When you start seeing pressure at corporations, in terms of more defaults and more M&A (mergers and acquisitions) activity ... when you see companies trying to hold on for dear life, and that's when you start to see the bottoming of oil prices in North America."

The natural gas contract for February rose nine cents to US$2.47 per mmBtu.

Gold stocks dropped 2.3 per cent and February gold fell by $9.90 to US$1,097.90 an ounce.



Advertisements

Latest Economic News

  • Canadian airline profits will fall in 2018 on higher costs: Conference Board

    Economic CTV News
    MONTREAL - The Conference Board of Canada says the growth of the country's airline industry will slow in 2018 as profits are forecast to decrease from last year's peak primarily because of higher fuel and labour prices. Source
  • Commodities rollercoaster on $100 US oil talk, sanctions stress

    Economic CBC News
    Talk that Saudi Arabia has its sights on $80-$100 US a barrel oil again and of more U.S. sanctions on Russia ignited a rally in commodities and resource stocks on Thursday, though the potential boost to inflation hit fixed-income assets. Source
  • 'Pharma Bro' arrives at low-security federal prison

    Economic CTV News
    FORT DIX, N.J. -- The pharmaceutical-industry entrepreneur vilified for jacking up the price of a life-saving drug has been placed in a low-security federal prison in New Jersey. Martin Shkreli was moved Tuesday from the Brooklyn Metropolitan Detention Center in New York to the Federal Correctional Institution at Fort Dix. Source
  • WestJet to 'accelerate' inspections after deadly Southwest engine explosion

    Economic CTV News
    WestJet plans to speed up required inspections on its fleet of Boeing 737-700 jets, following an engine explosion on a Southwest Airlines flight that killed one passenger. A spokesperson for the Calgary-based carrier said only a “small portion” of its aircraft have the engine fan blades currently under investigation by the U.S. Source
  • Men arrested at Starbucks say they feared for their lives

    Economic CTV News
    PHILADELPHIA -- Rashon Nelson initially brushed it off when the Starbucks manager told him he couldn't use the restroom because he wasn't a paying customer. He thought nothing of it when he and his business partner, Donte Robinson, were approached at their table and were asked if they needed help. Source
  • B.C. heads to court over pipeline jurisdiction as builder says doubt warranted

    Economic CTV News
    VICTORIA -- British Columbia has announced it will head to court by month end to clarify the province's jurisdiction over the Trans Mountain pipeline expansion project. Also Wednesday, the CEO of the pipeline's builder, Kinder Morgan said the events of recent days have reinforced his concerns about the viability of the $7.4-billion project. Source
  • Trade issues expose the limits of Trump-Abe 'bromance'

    Economic CTV News
    PALM BEACH, Fla. -- Japanese Prime Minister Shinzo Abe courted the new American president with a golden driver not long after Donald Trump won the White House. He's met with the billionaire businessman more than any other world leader, and he's Trump's second-most frequent caller. Source
  • Australian bank charges dead client service fee for a decade

    Economic CTV News
    MELBOURNE, Australia -- Financial advisers working for Australia's largest bank continued charging clients service fees after they died -- in one case for more than a decade -- a government inquiry heard on Thursday. The Commonwealth Bank had been receiving complaints from clients of being charged for services that had not been provided since 2002, according to documents presented to the inquiry into misbehaviour in Australia's financial sector. Source
  • Central bank gambles Canadians won't get into the inflation habit: Don Pittis

    Economic CBC News
    Canadian borrowers fearful of another hike in Bank of Canada interest rates are likely off the hook for three months at least. There is a tiny chance central bank governor Stephen Poloz and his deputy Carolyn Wilkins could raise rates at the next meeting on May 30, but since there is no news conference scheduled to explain their actions, it's likely the next opportunity to hike won't be until July. Source
  • U.S. regulator orders fan blade inspections after jet engine explosion

    Economic CTV News
    PHILADELPHIA -- U.S. airline regulators have ordered inspections on engine fan blades like the one that snapped off a Southwest Airlines plane, leading to the death of a woman who was partially blown out a window. Source