The Stock Market At Close – Thursday, August 17
The Toronto Market
The TSX composite index declined -86.84 points, or -0.4% to close at 19,812.23. The market is in a downward trend. The bond yields have entered a territory where they are a definite threat to the markets. Today, the 10-yield was as high as 3.828% at some point. That is the highest level in a decade and a half. That is bad news for the stock market.
The energy sector was the only TSX sector which did not close in the red today. It gained 1.2%. Utilities sector was the next best performing sector. It declined by -0.13% (roughly 13 out of ten thousand – small decline depending on one’s portfolio size). The Financials sector was down -0.75%. Technology took the big hit. It was down -2.30%. Discretionary Consumer Goods was down 1% and Industrials was down -0.85%.
The TSX The Past Year: Below is the 1-year daily chart for the TSX. The index crossed its year-ago value during the big decline on Tuesday. If your investment was tightly tied to the TSX you would be today below where you were a year ago. All Indications are that the decline trend would continue in at least in the short term.
Today’s Statistics: Today, the declined issues (decliners) completely outnumbered the gaining issues (advancers). The ratio of decliners to advancers to was 2.23-to-1.00. In real numbers, 421 advancers to 939 decliners with 221 unchanged. There were 9 new 52-week highs and 63 new 52-week lows. The total volume of shares traded for gaining stocks was 113,573,936 or 46.1%; the total volume for declined stocks was 124,800,461 or 50.6% and 8,230,203 or 3.3% for “Unchanged”.
The total volume of stocks traded today was 246,604,600 compared to 311,477,334 Tuesday.
The US Market
The Dow Jones index declined -290.91 points, or -0.84%, to close at 34,474.83. The S&P 500 declined -33.97 points, or -0.77%, to close at4,370.36. The Nasdaq Composite declined -143.75 points, or -1.07%, to close at 13,330.88.
The labor market in the US remained tight. A report from the Labor Department showed a fall in jobless claims last week. Robust U.S. economic growth suggests that the Fed is likely going to keep raising interest rates or at least not start to lower interest rates any time soon. The inverted curve remains where return on long term yields are lower than short term yields.
Energy was the only sector in the US markets today that ended the market session with a gain. The sector gained 0.87%. basic Materials sector declined -0.12%. The Utilities sector declined -0.46%. Technology was down -0.98% and Financials was down -1.175 while Discretionary consumer Goods and Services declined -1.41%. Today’s market decline was broad based.
The market is definitely in a downward trend. All the major indexes are now below their 50-day moving average chart.
Today’s Statistics: Today, declined issues (decliners) totally outnumbered the gaining issues (advancers) on both the NYSE and NASDAQ. The ratio of decliners to advancers on the NYSE was 2.43-to-1. In real numbers, 1,160 advancers to 2,824 decliners with 278 unchanged. There were 27 new 52-week highs and 144 new 52-week lows. The total volume of volume-gaining stocks was 356,084,703 or 38.1%; the total volume of declined-volume stocks was 564,116,584 or 60.4%; and 14,477,105 or 1.5% “Unchanged”.
The total volume of stocks traded on the NYSE today was 934,678,392 compared to 867,635,741 on Tuesday.
On the NASDAQ, the ratio of decliners to advancers was 2.02-to-1 and difference was more pronounced than on the NYSE. In real numbers, 2,912 decliners to 1,436 advancers with 385 unchanged. There were 36 new 52-week highs and 299 new 52-week lows. The total volume of volume-gaining stocks was 1,353,827,461 or 24.9%; the total volume of declined-volume stocks was 4,047,875,033 or 74.4% and 41,903,932 or 0.8% for “Unchanged”.
The total volume of stocks traded was 5,443,606,426 compared to 4,645,209,539 compared on Tuesday. The volume today was much higher than the volume the last two days.
Oil and the money markets: U.S. crude oil prices fell 1.8% to $80.99 a barrel. China’s economic woes, especially in the property sector, are weighing on industrial commodities.
10 –year Treasury Yield: The benchmark 10-year Treasury yield rose 6 basis points to 4.32%.
Stocks In The News/Stocks To Watch
The Toronto Market
According reports today, Goldman Sachs reiterated its BUY rating on Suncor Energy Inc. (TSX:SU) stock while raising its price target to US$34.00 from US$33.00 as it reviewed its estimates following second-quarter results from the oil producer and refiner. “For the quarter, SU reported CFPS and production slightly above our estimates, with the reported CFPS including a C$275M before-tax restructuring charge related to the company’s workforce reduction plans. On the call, management discussed Upstream production expectations for the remainder of the year, reiterated capital allocation strategy of balancing shareholder returns and leverage reduction, and provided updated commentary on key corporate initiatives, including recently announced cost-cutting efforts and senior management changes. As we have previously discussed, we are constructive on new management, including CEO Mr. Rich Kruger given his prior experience in mining and perspective on balance sheet preservation / capital returns.”
The US Market
Payment Systems software companies were mostly down today but Cisco Systems Inc. (CSCO) gained 3.3% as the companies fourth-quarter results beat estimates. The CEO talked about the potential for embedding AI technology into Cisco System products. Shares of Pfizer Inc. (PFE) also rose 2.9% today as the company said its updated COVID-19 shot, which is being tested against emerging variants, showed neutralizing activity against the “Eris” subvariant in a study conducted on mice.
Technology stocks were until recently the high flyers in the market. The market is clearly in the downtrend now but the Technology stocks have been kind of distorting the market picture for sometime. Technology big-caps were literally keeping the market index readings up. Meta Platforms (META) is a good indication of the trend then and the trend now.
The future of automobiles is Electric Vehicles. For now though EV stocks are still struggling. Li Autos Inc. (LI), ADR is, however, a stock to keep an eye on – add to the watchlist for long term investors. The Chinese EV manufacturer is a major competitor to Tesla Inc. in the Chinese market. EVs are best considered as long term investments. The Chinese economy is not at its best right now especially with major troubles in the properties market currently in China.
Regular Market Day Features
The Beginner Investor’s (Canadian stocks) Watchlist
We loaded our beginners watchlist with bank stocks and other blue chip stocks to minimize volatility and emphasize protection of the capital. The banks have recently come under pressure even with Moody’s watch for rating re-evaluations The good news is that the banks will always pay dividend.
The Canadian Vanguard Chinese Stocks Watchlist
The market is in a down trend. It may not be a good to bring new money in to the market. This is the time to keep working on pruning the watchlist while waiting for the market trend to reverse.
EV, Energy and Resource Stocks Watchlist
Nutrien Ltd (NTR), after having climbed for several sessions declined for sessions and now appears to be in the early stages of a flat base.
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