Stock market: the winners and losers of May 29

(Illustration: Camille Charbonneau)

The main Canadian stock index fell 1.6% on Wednesday, part of a general decline, while American stock markets also lost ground.

The S&P/TSX Composite Index lost 367.07 points to 21,897.98.

In New York, the Dow Jones industrial average plunged 411.32 points to 38,441.54. The S&P 500 index slipped 39.09 points to 5,266.95, while the Nasdaq Composite Index fell 99.30 points to 16,920.58.

The rise in bond yields weighed on the markets on Wednesday, particularly on the most rate-sensitive sectors, indicated Pierre-Benoît Gauthier, vice-president of investment strategy at IG Wealth Management.

“These increases follow the low bond auctions we have had all week,” he said.

“It’s going to be volatile,” added Pierre-Benoît Gauthier, but “I don’t think it’s necessarily a trend.”

Investors continue to adjust their expectations for interest rate cuts from the U.S. Federal Reserve, he said. These expectations have been reduced significantly from earlier this year as economic data came in better than expected.

On Thursday and Friday, investors will receive new data from the United States, including the Personal Consumption Expenditures Index, a key measure of inflation. This data will constitute important pieces of information as market observers try to determine whether a reduction in interest rates is possible before the end of the year, underlined Pierre-Benoît Gauthier.

“If there are going to be reductions before the election, they need to be done fairly quickly,” he said. We need data, good data that would justify a reduction, and we need it now.”

For the report on the personal consumption expenditure (PCE) index, anything higher than expected will be “very, very bad,” argued Mr. Gauthier.

When it comes to GDP, a much stronger or weaker result than expected would also be viewed negatively, he said.

The American consumer has remained surprisingly resilient, argued Pierre-Benoît Gauthier, even if the picture is increasingly polarized.

“It feels like there are two types of consumers right now,” he said. Those who are doing well, and those who are doing badly, and none in between.”

It’s a different story in Canada.

“I still believe that we could act before the Fed because the Canadian consumer is clearly in a difficult situation, while the American consumer, it is not so clear,” affirmed Pierre-Benoît Gauthier.

BMO and the National Bank of Canada were the last Canadian banks to publish their results on Wednesday. BMO’s profits fell short of expectations due to higher loan loss provisions and U.S. growth woes, while National Bank saw profits grow even as its loan loss provisions also increased .

Here are the winners and losers for May 29, 2024:

The S&P/TSX index of the TSE
Price Change ($CAN) Change (%)
Winners
AEterna Zentaris (AEZS) 13.90 2.38 20.66
Arizona Metals (AMC) 2.52 0.28 12.50
Ag Growth International (AFN) 51.15 5.13 11,147
Losers

Bank of Montreal (BMO)

119.48

-11.62

-8,863
Lithium Americas (LAC) 4.58 -0.37 -7.475

Only titles worth more than $1 are considered in the Winner/Loser ranking.

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