TSX Flat at Monday Open
Equities in Canada’s largest market fell on Monday, tracking Wall Street, pressured by worries over a spike in inflation after commodity prices jumped on vaccine-led recovery hopes.
The S&P/TSX Composite backed off 8.51 points to open Monday at 18,375.76.
The Canadian dollar slipped 0.21 cents to 79.15 cents U.S.
On a day without macroeconomic news, it was reported that Canadian banks are set to post their fourth straight year-on-year quarterly profit drop when they report results next week, the longest decline streak since the financial crisis, on margin compression and declining commercial lending, but flattening loan loss provisions signal a turning point.
RBC raised the rating on Calfrac Well Services to sector perform from underperform. Calfrac shares gathered four cents, or nearly 1%, to $4.14.
What’s more, RBC raised the rating on Lightspeed POS to outperform from sector perform. Lightspeed shares galloped $3.87, or nearly 4%, to $101.80.
Finally, RBC raised the rating on MEG Energy to outperform from sector perform. MEG shares jumped 34 cents, or 5.8%, to $6.22.
The TSX Venture Exchange gained 3.89 points to start out Monday at 1,102.45.
Eight of the 12 TSX subgroups were negative, however, in the first hour, with health-care 1.7% under the weather, information technology shedding 1.3%, and utilities off 0.9%.
The four gainers were led by gold, up 2.3%, energy, up 2.2%, and materials, surging 1.6%.
U.S. stocks fell on Monday as a continuous rise in bond yields dented the appetite for risk assets, particularly growth technology stocks.
The Dow Jones Industrials retreated 87.94 points to 31,406.38,
The S&P 500 slid 19.2 points to 3,887.51.
The NASDAQ Composite dumped 137.5 points, or 1%, to 13,375.93.
Monday’s move came after the S&P 500 slid 0.7% and the NASDAQ Composite dropped 1.6% last week each snapping two-week win streaks. The blue-chip Dow eked out a 0.1% gain in the same period, supported by Caterpillar and JPMorgan.
The market is headed into the final week of February with solid gains. The Dow and the S&P 500 have risen more than 5% this month, while the NASDAQ has climbed 6.2%.
Airline stocks rebounded after Deutsche Bank upgraded several of the shares. American Airlines jumped more than 7%.
On the pandemic front, the White House said that it expects to ship out millions of delayed coronavirus vaccine doses this week after a sweeping winter storm disrupted logistics. Gov. Andrew Cuomo said on Sunday that a New York resident has tested positive for the COVID-19 variant first identified in South Africa.
Some equity investors grew concerned about rapidly rising Treasury yields in recent weeks as they could especially hurt high-growth companies reliant on easy borrowing while diminishing the relative appeal of stocks.
Tesla shares lost 3% following a 4% decline last week. Big Tech stocks came under pressure as Apple, Amazon, Microsoft, Netflix and Alphabet all traded at least 1% lower.
All eyes will be on Federal Reserve Chairman Jerome Powell, who delivers his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday. His comments on rates and inflation could determine the market direction for the week.
Prices for 10-Year Treasurys lost some ground, raising yields to 1.35% from Friday’s 1.34%. Treasury prices and yields move in opposite directions.
Oil prices gained $1.56 to $60.80 U.S. a barrel.
Gold prices raced ahead $29.30 to $1,806.70