(Illustration: Camille Charbonneau)
Toronto — Shares of tech heavyweight Shopify fell nearly 19% on Wednesday, weighing on Canada’s main stock index, while U.S. markets were mixed.
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Shopify posted a loss in the first quarter despite an increase in revenue. The company also expects slower revenue growth in the next quarter.
Shopify is the largest technology company on the TSX and a significant weight in the index, points out Jennifer Tozser, senior wealth management advisor and portfolio manager at Tozser Wealth Management at National Bank Financial.
The company’s profits weren’t bad, but its prospects for future growth weren’t as rosy as investors had hoped, Tozser says.
Shopify is one of many companies that did well during the pandemic and is now wondering what its post-COVID future will look like, she says.
As Canada’s earnings season begins, Tozser says she doesn’t expect many surprises.
“This is why Shopify is so unique […] because it is not a very developed sector in Canada,” she maintains.
The TSX Information Technology Index fell 4.2% on Wednesday, while most other sectors posted modest gains.
Profits have continued to flow south of the border as the American season draws to a close.
Uber Technologies saw its stock price fall after its results fell short of analysts’ expectations, while Lyft stock rose after beating expectations.
Ms. Tozser believes markets will experience sector rotation as central banks begin to cut interest rates, which will favor companies in sectors such as industrials, consumer discretionary and real estate investment trusts.
In Canada, rate cuts could begin as early as June, with weak economic data forcing the Bank of Canada to relax its measures, says Ms. Tozser.
In the United States, reductions are not expected until the end of the year.
This places the Bank of Canada in a difficult situation, according to Ms. Tozser.
“The problem is if we cut and the United States doesn’t, we’re going to weaken our currency,” she says.
– With the Associated Press
Rosa Saba, The Canadian Press
Here are the winners and losers for May 8, 2024:
| The S&P/TSX index of the TSE | Price | Change ($CAN) | Change (%) |
| Winners | |||
| Stella-Jones (SJ) | 80.61 | 7.94 | 10,926 |
| WELL Health Technologies (WELL) | 3.96 | 0.38 | 10,615 |
| Nano One Materials (NANO) | 2.08 | 0.19 | 10,053 |
| Losers | |||
| Enerflex (EFX) | 6.60 | -1.79 | -21.335 |
| NexGen Energy (NXE) | 10.52 | -1.48 | -12.333 |
| Lion Electric Company (LEV) | 1.31 | -0.12 | -8,392 |
Only titles worth more than $1 are considered in the Winner/Loser ranking.
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