BNN Bloomberg's closing bell update: Nov. 22, 2019
TORONTO -- Canada's main stock index ended a four week winning streak after falling from a record high as investors remained cautious about trade risks.
And the S&P500 had almost the same trajectory, falling for the first time in seven weeks despite rising on Friday.
"There's been a lot of euphoria around the trade deal so a little bit of consolidative action and the potential here for a little bit of a corrective reversal in the next couple of weeks is not out of the realm of possibility," said Mike Archibald, Associate Portfolio Manager with AGF Investments Inc..
The S&P/TSX composite index closed down 44.35 points at 16,954.84 to end the week off 73.63 points after five losing sessions.
In New York, the Dow Jones industrial average was up 109.33 points at 27,875.62. The S&P 500 index was up 6.75 points at 3,110.29, while the Nasdaq composite was up 13.67 points at 8,519.88.
Markets started with intraday corrections by selling off in the first half of the day before recovering somewhat by the end of the trading session.
"It seems as though people are starting to move forward their expectations to 2020 and hoping for better economic data of which we did get a little bit this morning," Archibald said, pointing to stronger-than-expected retail sales in Canada and good PMI data and consumer sentiment in the U.S.
The trade war between the world's two-largest economies remains unresolved with U.S. President Donald Trump saying Friday that a first phase agreement is "potentially very close" while Chinese President Xi Jinping told a visiting U.S. business delegation that China holds a "positive attitude" about trade talks.
However, Xi added that Beijing is not afraid to fight back and Trump said he's not as anxious as his counterpart for a deal.
Archibald expects negotiations will continue right until the Dec. 15 deadline when US$156 billion in new tariffs on China, including those on consumer goods, are set to come into force.
"I expect that you're probably going to see more positioning by both sides to try and strengthen their case for a better deal."
The Canadian dollar traded for 75.26 cents US compared with an average of 75.27 cents US on Thursday.
Seven of the 11 major sectors on the TSX were lower led by health care which fell 4.9 per cent as cannabis producers returned to losing ways a day after enjoying strong gains.
Shares of the Green Organic Dutchman Holdings Inc. lost 18.8 per cent, followed by Hexo Corp. and Aurora Cannabis Inc. at 15.9 and 13.5 per cent respectively.
Canopy Growth Corp. closed down almost 10 per cent Friday after global alcohol giant Constellation Brands Inc. said it did not plan to make any more cash contributions to the cannabis firm.
"When that came out it kind of pressured the space in general," said Archibald, who added that some investors booked some gains from Thursday's large share price increases.
Materials was also lower as gold prices were unchanged. The December gold contract remained at US$1,463.60 an ounce and the December copper contract was up 2.45 cents at US$2.65 a pound.
The energy sector fell with Crescent Point Energy Corp, Encana Corp. and Husky Energy Inc. shares dropping on lower crude oil prices.
The January crude contract was down 81 cents at US$57.77 per barrel and the January natural gas contract was up 8.8 cents US$2.71 per mmBTU.
Despite Friday's decrease, crude prices are up 27 per cent so far in 2019.
"It is the most beaten up sector in the marketplace. I think you probably have to stay patient in the next few weeks because you're going to have some tax-loss selling in that space but it is shaping up to be some good opportunities in that sector of the market."