Selloff Engulfs TSX Monday

Aurora, IAMGOLD Featured

Stocks throughout North America were roughed up in the worst way Monday, as investors showed their apprehension about rising interest rates aimed at taming inflation.

The S&P/TSX plummeted 532.26 points, or 2.6%, to close Monday at 19,742.56.

The Canadian dollar lost 0.58 cents to 77.56 cents U.S.

Cannabis companies proved the biggest losers on the day, with Aurora Cannabis down 18 cents, or 10.2%, to $1.59, while Canopy Growth faded 39 cents, or 8.4%, to $4.25.

Gold and other resources took it on the chin Monday, Alamos Gold sank 86 cents, or 8.3%, to $9.53, while IAMGOLD Corp. backed off 32 cents, or 10.8%, to $2.64.

Fortuna Silver Mines backpedaled 53 cents, or 11.3%, to $4.15, while K92 Mining lost $1.11, or 11.3%, to $8.76.

Canada will announce a multi-million-dollar investment on Monday to make the Jansen potash mine run by the globe's largest listed miner, BHP Group, "the cleanest and most sustainable in the world," a government source said.

ON BAYSTREET

The TSX Venture Exchange was hammered 32.8 points, or 4.7%, to 671.90.

All 12 TSX subgroups stayed in the red throughout the session, with health-care surrendering 5.1%, gold dulling in price 4.7%, while materials slipped 4.6%.

ON WALLSTREET

The 2022 stock selloff intensified on Monday with the S&P 500 tumbling to a fresh low for the year and closing in bear market territory as recession fears grew ahead of this week’s key Federal Reserve meeting.

The Dow Jones Industrials handed back 876.05 points, or 2.8%, to 30,516.74.

The S&P 500 stumbled 151.23 points, or 3.9%, to 3,749.63, to its lowest level since March 2021, bringing its losses from its January record to more than 21%.

The benchmark closed in bear market territory (down more than 20% from its high) after trading there briefly on an intraday basis about three weeks ago.

Some on Wall Street say it’s not an official bear market until it closes there and that’s what happened on Monday. The stock market’s last bear market was in March 2020 at the onset of the pandemic.

The NASDAQ Composite plunged 530.80 points, or 4.7%, to 10,809.23.

Shares of Boeing tunneled 9%, Salesforce cratered 6%, and American Express fell about 5%, dragging down the Dow as recession fears picked up. Beaten-up tech shares also took a hit with Netflix, Tesla and Nvidia down more than 7% as the NASDAQ touched a fresh 52-week
low and its lowest level since November 2020.

Travel stocks also slipped on Monday as Carnival Corporation lost 10% and Norwegian Cruise Line plummeted about 12%. Delta Air Lines dropped more than 8% while United tumbled about 10%.

The Federal Reserve is expected to announce at least a half-point rate hike on Wednesday. The Fed has already raised rates twice this year, including a 50-basis-point (0.5 percentage point) increase in May in an effort to stave off the recent inflation surge. Though some economists after the hot CPI report believed the Fed could even raise rates by 0.75% this week.

Treasury prices wallowed, raising yields to 3.38% from Friday’s 3.16%. Treasury prices and yields move in opposite directions.

Oil prices gained 41 cents to $121.08 U.S. a barrel.

Gold prices withered $51.50 to $1,824.00 U.S. an ounce.