Stocks Stumble in Wake of Throne Speech

Metals Tarnished, Consumer Stocks Climb

Equities in Canada’s biggest market went for a sharp ride downward at Wednesday’s close, as investors registered their disappointment at the federal government’s Throne Speech.

The TSX toppled 325.78 points, or 2%, to 15,817.11.

The Canadian dollar fell 0.47 cents to 74.73 cents U.S.

In its document, passed down Wednesday afternoon, Prime Minister Justin Trudeau’s Liberal government promised to extend emergency support for Canadians hit by the COVID-19 crisis while building a more resilient economy that empowers women, fights climate change and tackles systemic racism.

The government also pledged to expand supports for struggling businesses and to extend the wage subsidy program until next summer. That program, which aims to keep employees on the payroll to ensure a smooth post-pandemic economic transition, covers 75% of employee wages, up to $847.00 a week.

Opposition MPs were looking for some measures of restraint in the speech, but it was stated clearly by the government that – quote - "this is no time for austerity."

Gold stocks took a particular pounding, with Alamos Gold lurching lower 92 cents, or 7.4%, to $11.47, while Yamana Gold retreated 70 cents, or 8.9%, to $7.16.

Health-care stocks also got bruised, with Aurora Cannabis cratering $2.82, or an incredible 29%, to $6.91, while Canopy Growth sank $1.74, or 8.2%, to $19.51.

Among materials, Silvercorp Metals dived $1.20, or 11.5%, to $9.24, while Silvercrest Metals ducked $1.36, or 11%, to $11.02.

Consumer stocks tried to bail out the rest of the market without success. Canada Goose Holdings added $1.27, or 3.3%, to $39.27, while Canadian Tire picked up $4.06, or 3.2%, to $132.73.

Alimentation Couche-Tard gained 79 cents, or 1.7%, to $46.86, while Empire Company moved higher 30 cents to $38.60.

ON BAYSTREET

The TSX Venture Exchange plunged 37.66 points, or 5.3%, to 677.04.

All but two of the 12 TSX subgroups had sunk into the minus column by the closing bell, the biggest lumps taken by gold, tumbling 5.7%, health-care, down 5.3%, and materials, off 5.2%

The two gainers were consumer discretionary stocks, nosing up 0.5%, while consumer staples broke even plus 0.2%.

ON WALLSTREET

Stocks fell sharply on Wednesday, adding to September’s struggles, as tech shares took another leg lower and investors fretted over uncertainty around the coronavirus pandemic and further stimulus.

The Dow Jones Industrial Average had loosed 525.05 points, or 1.9%, to close at 26,763.13.

The S&P 500 lost 78.65 points, or 2.4%, to 3,236.92.

The NASDAQ dropped 330.65 points, or 3%, to limp into the end the session at 10,632.99.

Shares of Amazon sank 4.1%, and Netflix dropped 4.2%, to lead Big Tech lower. Facebook slid 2.3%. Alphabet closed 3.5% lower. Apple ended the day down 4.2% and Microsoft dipped 3.3%.

Shares of Tesla fell 10.3% after Elon Musk offered new delivery predictions for 2020 and detailed a new battery design that he claims will make Tesla’s cars cheaper to produce. The stock was also under pressure after Tesla sued the U.S. government to overturn tariffs on China.

The S&P 500 is in the red 7.5%, and the Dow is off 5.9% for the month. The NASDAQ has dropped 9.7% over that time period. Shares of Facebook, Amazon, Apple, Netflix, Alphabet and Microsoft are all down at least 11% in September.

Nike shares jumped 8.8% after the company said digital sales surged more than 80% last quarter. Earnings and sales blew past analysts expectations last quarter and the company gave a forecast for growth in the new fiscal year.

Prices for the 10-Year Treasury were lower, driving yields up to 0.68% from Tuesday’s 0.67%, Treasury prices and yields move in opposite directions.

Oil prices subtracted 19 cents to $39.61 U.S. a barrel.

Gold prices dropped $42.70 to $1,864.90 U.S. an ounce.