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Negative session in Toronto and New York

The main index of the Toronto Stock Exchange dropped more than 100 points on Tuesday in a session in which the decline in the price of gold weighed on the materials sector in particular.


Posted on Aug 11, 2020 at 9:50 a.m.


Updated at 10:18 a.m.



Agence France-Presse and The Canadian Press

The S & P / TSX Composite Index closed at 16,497 points, down 108.5 points.

The materials sector, which includes the major gold producers, had a difficult day, falling 5.89%, as the price of the precious metal, which has reached new highs in recent weeks, has tumbled down.

On the New York Commodities Exchange, the price of an ounce of gold closed at US $ 1,946.30, down from US $ 93.40.

“I think we can see a shift towards risk today,” Nathalie Taylor, portfolio manager for CIBC said in an interview. You see a lot of strength in the cyclical sectors as well as weakness on the defensive side. ”

In his view, this is partly due to news that suggests the economy continues to recover from the COVID-19 pandemic. In the United States, President Donald Trump has announced that he is considering a reduction in the capital gains tax, while Russia has announced a vaccine against the novel coronavirus.

In the currency market, the Canadian dollar traded at an average rate of 75.24 cents US, compared to its average rate of 74.88 cents US on Monday.

For its part, the price of a barrel of crude fell 33 cents US to $ 41.61. The price of a pound of copper gained nearly a US cent, to around US $ 2.88.

Drop in New York

On Wall Street, the Dow Jones industrial average retreated 104.5 points to end at 27,687 points, while the broader S&P 500 index escaped 26.78 points, to 3,334 points. The technology-heavy NASDAQ Composite Index closed at 10,783 points, down 185.53 points.

Wall Street, weighed down by the decline of major technology stocks, ended lower Tuesday, accelerating its losses at the end of the session after statements by the leader of the Republican majority in the Senate on negotiations around measures to help Americans.

From the start of the session, most of the big names in the tech sector retreated, which particularly weighed on the NASDAQ.

This decline is linked, according to several analysts, to a rotation towards cyclical stocks, dependent on a recovery of the economy, and implies that investors have greater confidence in the future.

According to Maris Ogg of Tower Bridge Advisors, “fear is no longer the dominant factor and market participants are willing to take a little more risk.”

Tuesday’s optimism is particularly linked to the announcement by Russian President Vladimir Putin that Russia had developed the “first” vaccine against the new coronavirus, named “Sputnik V”, and that it gave “lasting immunity” .

The World Health Organization (WHO), however, reacted cautiously to this announcement, recalling that the “prequalification” and approval of a vaccine went through “rigorous” procedures.

However, it reinforces the idea among investors that a vaccine will soon be available even if the virus continues to spread, believes Mr.me Ogg.

Less than an hour before the close, the major New York Stock Exchange indices all went into the red after statements on Fox News by Senate Republican boss Mitch McConnell, who was skeptical of the recovery negotiations around new budgetary measures to support the economy.

“The about-face (indices, Editor’s note) was rapid, most likely due to the algorithms, which reacted to the articles on McConnell,” observes Quincy Krosby of Prudential Financial.

The White House and Democrats continue to blame each other after two weeks of tense discussions ahead of the presidential election and the four decrees signed by Donald Trump on Saturday.

However, these temporary measures risk being challenged in court since it is in Congress that the US Constitution vests most of the country’s budget decisions.

“This is also a market where volumes are lighter due to the summer lull and the market can go up or down much faster than usual,” explains Mme Krosby.

Uber and Lyft down

Among the values ​​of the day, the car reservation platforms with driver Uber (-3.28%) and Lyft (-1.29%) fell after a preliminary injunction from a California judge to requalify their drivers as employees instead of self-employed workers, which will take effect in ten days if it is not revoked.

The two companies are opposed to this change, ensuring that the status of contractual offers more flexibility to drivers and allows to guarantee a cheaper price for the rides for the users.

The BioNTech laboratory fell 7.44% after reporting larger than expected losses and lower than expected sales in the 2e trimester. The group also announced that it could present the results of phase 2b / 3 clinical trials for a vaccine project against COVID-19 in October.

Inovio Pharmaceuticals, which reported a quarterly loss of nearly $ 129 million, saw its stock plummet by more than 23%. The company also said phase 2/3 trials of its vaccine project would begin in September.

In the bond market, the 10-year US debt rate rose to 0.6399% around 8:45 p.m. GMT from 0.5755% on Monday evening.

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