Canada’s main stock index closed down along with the loonie as the energy and consumer staples sectors lost ground, while U.S. markets were mixed.
The modest uptick in most U.S. markets Wednesday was a small part of a continued widening of the performance gap of Canadian and other international markets against the U.S. that’s persisted this year, said Michael Currie, vice president and senior investment advisor at TD Wealth.
“We’re still seeing a big separation between the States and most of the world in terms of markets.”
The S&P/TSX composite index has climbed 1.9% this year, while the S&P 500 index is up 5.1% and the Nasdaq is up 13.8%.
The dichotomy as trade tensions continue is even worse when compared with China, which has seen its main market fall 9% this year, said Currie.
“So the more the trade skirmishes go on, although the U.S. seems to be getting blamed and perhaps rightly so, they seem to be benefiting, their markets are going up, their dollar is going up and the countries they’re at war with are suffering.”
The strength of the U.S. market comes as the Trump administration continues to escalate and find new targets for trade tensions. On Wednesday, U.S. Commerce Secretary Wilbur Ross announced a national security investigation into uranium.
The uranium investigation shows there is no end to trade issues in sight, said Currie.
“In the broad spectrum of the economy, it’s not a huge thing, but I think the theme people are getting here is this trade issue isn’t going away any time soon. It’s expanding rather than retracting.”
The S&P/TSX composite index closed down 41.84 points at 16,477.40 as energy stocks weighed on the index.
News on the energy front was mixed, as crude inventories rose and U.S. production increased while gasoline demand looked strong, said Currie.
Crude started the day negative but the September crude contract closed up US59¢ at US$67.75 per barrel.
In New York, the Dow Jones industrial average closed up 79.40 points at 25,199.29. The S&P 500 index was up 6.07 points at 2,815.62 and the Nasdaq composite index ended down 0.68 of a point at 7,854.44.
The Canadian dollar averaged US75.73¢, down 0.10 of a U.S. cent.
The August gold contract closed up US60¢ at US$1,227.90 an ounce and the September copper contract was up a penny at US$2.76 a pound. The August natural gas contract was down US2¢ at US$2.72 per mmBTU.
Uranium producer Cameco Inc. closed down 15¢ or 1.04% at $14.28 after news of the U.S. uranium investigation.