End of Week Spells Stock Carnage

Energy, Industrials Fall Hard

Stocks in Canada’s largest market thundered lower – mimicking their jittery American cousins, after some indiscreet tweet by U.S. President Trump threw the entire trade situation with China into confusion, if not outright chaos.

The S&P/TSX Composite stumbled 215.88 points, or 1.3%, to close Friday and the week at 16,037.58

The Canadian dollar nicked up 0.01 cents to 75.22 cents U.S.

Biggest decliners on TSX were shares of energy companies. Birchcliff lost 19 cents, or 8.9%, to $1.94, while Meg Energy shed 41 cents, or 8.2%, to $4.60.

Industrials also got bruised, most notably, Bombardier, which lost 13 cents, or 7.6%, to $1.59, while Transcontinental dipped 83 cents, or 5.7%, to $13.80.

Tech stocks were also headed in a downward direction, as Quarterhill Inc. lost 13 cents, or 6.8%, to $1.77.

Gold stocks proved among the few to shine, as IAMGOLD picked up 39 cents, or 8.7%, to $4.85, while Kinross Gold gained 46 cents, or 7.4%, to $6.67.

Elsewhere in mining, First Majestic Silver leaped 90 cents, or 6.6%, to $14.62, while Pretium Resources climbed $1.58, or 9.6%, to $18.05.

Analysts say Canadian house prices will be flat this year, but will pick up in 2020, driven by lower mortgage rates and solid domestic economic conditions.

On the economic beat, Statistics Canada said retail sales were essentially unchanged in June. Stronger sales across most sub-sectors were offset by lower sales at motor vehicle and parts dealers and gasoline stations. Excluding sales in these two sub-sectors, monthly retail sales advanced 1.7%


The TSX Venture Exchange gained 3.85 points to 581.95

All but two of the 12 Toronto subgroups were lower on the day, with energy fading 2.8%, industrials down 2.2%, and information technology stocks slipping 2%.

The two gainers were gold, popping 3.6%, while materials, up 2%.


Stocks plunged on Friday after President Donald Trump ordered in a series of tweets that U.S. manufacturers find alternatives to their operations in China. Apple led the way lower.

The Dow Jones Industrial Average plunged 623.34 points, or 2.4%, to end the week at 25,628.90. The losses brought the Dow’s decline for August to more than 4%.

The S&P 500 surrendered 75.84 points, or 2.6%, to 2,847.11

The NASDAQ dumped 239.62 points, or 3%, to 7,751.77.

The major indexes also posted weekly losses for the fourth straight time. The Dow dropped about 1% this week while the S&P 500 pulled back 1.4%. The NASDAQ lost 1.8%.

Apple shares dropped 4.6%. Elsewhere, Nvidia and Broadcom both fell more than 5%. Caterpillar shares, meanwhile, pulled back 3.3%.

Federal Reserve Chairman Jerome Powell delivered a speech from an annual central banking symposium in Jackson Hole, Wyoming.
In it he said the Fed will do what it can to sustain the current economic expansion. "Our challenge now is to do what monetary policy can do to sustain the expansion so that the benefits of the strong jobs market extend to more of those still left behind, and so that inflation is centered firmly around 2%."

Trump tweeted on Friday: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing..your companies HOME and making your products in the USA.”

China will implement new tariffs on another $75 billion worth of U.S. goods, including autos. The tariffs will range between 5% and 10% and will be implemented in two batches on Sept. 1 and Dec. 15.

This is the latest escalation in the trade war that has been going on since last year. Earlier this month, Trump said the U.S. will impose tariffs on $300 billion worth of Chinese imports. The administration then said some of those tariffs would be delayed.

Prices for the benchmark 10-year U.S. Treasury gained sharply, lowering yields to 1.53% from Thursday’s 1.62%. Treasury prices and yields move in opposite directions

Oil prices lost $1.45 to $53.90 U.S. a barrel.

Gold prices picked up $29.60 to $1,538.10 U.S. an ounce.