Toronto stocks slumped to near two-week lows on Tuesday, driven by losses in financial stocks after hotter-than-expected domestic inflation reading and U.S. retail sales numbers fanned concerns of more interest rate hikes.
The TSX collapsed 303.1 points, or 1.5%, to move into noon hour EDT Tuesday at 19,987.44.
The Canadian dollar moved backward 0.13 cents to 74.17 cents U.S.
Shares of Premium Brand Holdings fell $6.03, or 5.5%, hitting the bottom of the index, at $103.27, after brokerage Stifel downgraded the stock.
Macroeconomic notes Tuesday include those from the Canadian Real Estate Association, which said national home sales edged down 0.7% month-over-month in July. Actual (not seasonally adjusted) monthly activity came in 8.7% above July 2022. Elsewhere, the Consumer Price Index (CPI) rose 3.3% on a year-over-year basis in July, following a 2.8% increase in June. On a seasonally adjusted monthly basis, the CPI rose 0.5% in July.
Motor vehicle sales totaled 165,400 in June, compared to 165,600 in the prior-year month.
Lastly, manufacturing sales for June declined 1.7%, mainly on lower sales of petroleum and coal products, chemicals, and machinery.
Traders are betting on a 77.32% probability for the BoC to hold interest rates steady in its September meeting.
ON BAYSTREET
The TSX Venture Exchange dipped 4.61 points to 592.46.
All 12 TSX subgroups remained negative by midday, with materials skidding 2.1%, financials off 1.5%, and gold dulled in price 1.3%..
ON WALLSTREET
Stocks fell Tuesday as concern over the state of the global economy — China in particular — and a decline in U.S. banks combined to pressure Wall Street.
The Dow Jones Industrials tumbled 257.13 points to break for lunch Tuesday at 35,050.50
The S&P 500 index flopped 31.86 points to 4,457.86.
The NASDAQ index slumped 83.63 points to 13,704.70.
Shares of JPMorgan Chase, Citigroup, Wells Fargo and Bank of America were lower by nearly 2%. Those moves come after Fitch warned it may have to downgrade dozens of banks, including JPMorgan Chase. Last week, Moody’s lowered its rating on 10 U.S. while putting some big institutions on downgrade watch.
A packed earnings week for the largest retailers kicked into gear Tuesday. Home Depot reported earnings per share and revenue that beat analyst expectations, pushing its stock 1.7% higher. Later in the week, traders will parse releases from Target and Walmart.
On the data front, July’s U.S. retail sales data came in higher than expected, indicating a stronger-than-expected consumer. Retail sales increased 0.7% month-over-month. Meanwhile, economists had estimated a 0.4% increase, according to Dow Jones.
Sentiment across the globe was downbeat after disappointing data out of China and a surprise rate cut from the country’s central bank.
Industrial production in China increased by 3.7% in July from the year-earlier period, missing expectations. Retail sales also grew less than expected from the year-earlier period. Meanwhile, the People’s Bank of China lowered rates by 15 basis points to 2.5%. However, the rate cut failed to soothe investor concerns and instead raised more worry about an emerging property crisis in China.
Prices for the 10-year Treasury were up slightly, lowering yields to 4.18% from Monday’s 4.19%. Treasury prices and yields move in opposite directions.
Oil prices slipped $1.90 to $80.61 U.S. a barrel.
Gold prices doffed $5.50 to $1,938.50 U.S. an ounce.
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