BNN Bloomberg's closing bell update: Sep. 30, 2019
TORONTO -- Canada's main stock market closed lower on the first day of the week, but still managed to post its third consecutive quarterly gain of the year.
The S&P/TSX composite index closed down 35.64 points at 16,658.63 as it was dragged down by health care, materials and energy sectors.
Each quarter has been positive but the third-quarter gain was the smallest so far this year, says Michael Currie, vice-president and investment adviser at TD Wealth.
"It doesn't seem like it, just the way people are talking, but if you actually look at the numbers, year-to-date numbers on the markets are pretty darn strong," he said in an interview.
The TSX was up 1.7 per cent in the quarter and 16.3 per cent in the first nine months of the year.
On Monday, the health-care sector fell 2.1 per cent as shares of Aurora Cannabis Inc. dropped 4.9 per cent and Canopy Growth Corp. was down 3.8 per cent. It followed a U.S. recommendation that consumers should avoid vaping products containing marijuana. That came ahead of legalization of these products in Canada next month.
The materials sector was also lower as precious metals prices decreased, with gold dropping to its lowest level since early August, thus posting its first monthly decline in five months on an easing in geopolitical tensions.
"Any time we hear about more tension in the trade war that's usually good for gold so since that's kind of off today, that's pushed gold down 1.8 per cent," said Currie.
Kinross Gold Corp. shares were down 4.1 per cent while Barrick Gold Corp. lost 2.3 per cent, both with heavy volumes.
The December gold contract was down US$33.50 at US$1,472.90 an ounce and the December copper contract was down 1.9 cents at US$2.58 a pound.
Energy also decreased as crude oil prices continued to drop, linked to China's economic outlook remaining weak amid a trade war between the world's two largest economies.
In addition, fears about further conflicts in the Middle East faded as Saudi Arabia has been able to restore its oil output faster than expected following drone attacks.
"The Saudi attacks are just getting further in the distance, so less people concerned about that," said Currie.
The November crude contract was down US$1.84 at US$54.07 per barrel and the November natural gas contract was down 7.4 cents at US$2.33 per mmBTU.
Enbridge Inc. shares lost 2.7 per cent after the Canada Energy Regulator ordered it to suspend an open season it was holding for service on its Canadian Mainline oil pipeline system.
The technology sector gained with Shopify Inc. rising 1.8 per cent in lockstep with the U.S. technology sector, which climbed on Apple Inc. shares rising more than 2.3 per cent after the CEO said new iPhone sales were off to a strong start, prompting some analysts to raise their shipment forecasts.
The Canadian dollar traded for an average of 75.51 cents US compared with an average of 75.48 cents US on Friday.
In New York, the Dow Jones industrial average was up 96.58 points at 26,916.83. The S&P 500 index was up 14.95 points at 2,976.74, while the Nasdaq composite was up 59.71 points at 7,999.34.
The markets showed some strength after U.S. officials denied reports published on Friday that the administration is discussing limiting U.S. portfolio investments in China and delisting Chinese companies from U.S. stock exchanges, added Currie.
"The government pretty much dismissed all that today so it got people who were a little spooked by that a little more interested in getting back in the market."