The Stock Market At Close – Tuesday, May 23
The Toronto Market
The TSX composite index declined -205.05 points, or -1%, at 20,146.01, its lowest closing level since March 31. The technology and industrials sectors contributed largely to today’s loss by the index.
Today, only the energy sector of all ten sectors gained. Oil price rose today and the energy sector rose 0.51%. The financials ended the day down 0.15%, industrials were down 2.05%, and technology was down 3.1% while the resources (precious metals, base metals and fertilizers) lost 2%.
The big banks are scheduled to start reporting earnings tomorrow. The banks are expected to report a rise in bad debt provisions and highlight risks from commercial property loans when they report earnings.
Today’s Statistics: Today, the decliners outnumbered the advancers. The ratio of declined issues to gaining issues was 2.24-to-1.00. In real numbers, 993 advancers to 444 decliners with 180 unchanged. There were 39 new 52 week highs and 32 new 52 week lows. The total volume of shares traded for gaining stocks was 130,072,490 or 38.7%; the total volume for declined stocks was 194,424,373 or 57.9% and 11,265,840 or 3.4% for “Unchanged”.
The US Markets
The US markets today, were largely driven by the debt-ceiling talks and the possibility of default on payments by the US government if no deal is reached in time. The debt-ceiling talks continued today with no deal imminent. House Speaker Kevin McCarthy said the two sides are “not anywhere near close” to a debt-ceiling deal. At the same time, President Joe Biden and House Republicans don’t seem that far apart on provisions to raise the debt limit. Meanwhile, the recent uptrend in Treasury yields and the U.S. dollar may be finally weighing on stocks, along with various hints of weakening consumer spending.
The minutes from the May meeting of the Federal Open Market Committee, are due tomorrow. The minutes should give some insight into likely interest rate direction in the coming weeks.
Growth stocks got socked today, particularly in areas such as luxury retail, consumer spending, homebuilding and medical systems, even as long-dated U.S. government bond yields appeared to cool after a strong rise in recent sessions. Even during the final hour, investors looked reluctant to search for bargains. There was significant risk aversion especially in the late afternoon.
Today’s Statistics: Today, the decliners prevailed over the advancers on both the NYSE and the NASDAQ. The ratio of declined issues to gaining issues on the NYSE was a 1.71-to-1. In real numbers, 2,473 decliners to 1,441 advancers with 262 unchanged. On the NASDAQ, the ratio of declined issues to gaining issues was 1.20-to-1 or in real numbers, 2,386 decliners to 1,985 advancers with 453 unchanged.
On the NYSE, there were 42 new 52 week highs and 56 new 52 week lows. The total volume for gaining stocks was 389,015,624 or 41.3%; the total volume for declining stocks was 541,641,551 or 57.5%; and 12,115,589 or 1.3% “Unchanged”. Total volume of stocks traded was 942,772,764.
On the NASDAQ, there were 90 new 52 week highs and 79 new 52 week lows. The total volume of shares traded for gaining stocks was 1,733,074,288 or 41.3%; the total volume for declining stocks was 2,648,955,507 or 57.3% and 65,632,036 for “Unchanged” or 1.4%. Total volume of stocks traded was 4,447,661,831. The S&P 500 posted three new highs and one new low.
Oil and the money markets: U.S. crude oil prices rose 1.2% to $72.91 a barrel.
10 –year Treasury Yield: Debt limit worries pushed yields on one-month Treasury bills to record highs at 5.888%. The 10-year Treasury yield dipped 2 basis points to 3.7% after rising to 3.76% intraday.
Stocks In The News/Stocks To Watch
The Toronto Market.
A big gainer on the TSX today was Africa Oil Corp (TSX:AOI), the stock gained $0.22 or 8.43% with a volume of 984.6K shares traded. The company announced that it has submitted withdrawal notices to its joint venture partners on Blocks 10BB, 13T and 10BA in Kenya, to unconditionally and irrevocably, withdraw from the entirety of the joint operating agreements (“JOAs”) and Production Sharing Contracts (“PSCs”) for these concessions. The Company has concurrently submitted notices to Ministry of Energy and Petroleum, requesting the government’s consent to transfer all of its rights and obligations under the PSCs to its remaining joint venture partner.
The carrying value of the Kenya intangible exploration assets was written down to $58.6 million at December 31, 2022, and the Company intends to further impair this value to zero. Africa Oil President and CEO Keith Hill commented: “We have taken the decision to exit our Kenya concessions as our strategy has shifted to focus on production and high potential exploration opportunities, including our Orange Basin portfolio where we are now appraising the exciting Venus discovery, offshore Namibia.
Among other gainers today, Bausch Health Companies Inc. rose 5.0% earlier in the day after brokerage Jefferies lifted its price target to $9.5 from $7 but declined to close with a gain of $0.13 or 1.16% with a volume of 776.1k shares traded. The stock reached as high as $12.09 cents in the late morning largely but declined for the rest of the day. The stock today, lacked support to maintain higher value. The markets retreated most of the day today. It would appear that significant risk aversion was at play at the market today.
Cameco Corp gained $1.87 or 5.14% to close at $38.24. Last week the Canadian Nuclear Safety Commission renewed Cameco Corp’s waste facility operating License for Decommissioned Beaver Lodge Mine and Mill site for two years.
Suncor gained $0.52 or 1.3% to close the session at $39.35 with a volume of 12.2m shares traded. Goldman Sachs reiterated its buy rating on the shares of Suncor Energy (SU.TO) while trimming its price target to US$36.00 from US$37.00 on a higher cost of capital for Canada’s No.1 oil producer and refiner. Suncor is ex-dividend on June 2nd with quarterly dividend payment on June 26th. The quarterly dividend payable is $0.52, the annual yield rate comes to 5.29% quite good for income investors especially our seniors.
For simple comparison purpose, Royal Bank (RY) stock closed the market session today at $125.88. Royal Bank, was ex-dividend April 24th with $1.32 dividend payment or a yield at 4.19%. For seniors with average income and constrained for some reason not able to buy higher priced stock, Suncor stock is worthy of consideration. The reader is reminded that these figures are time dependent and should always use updated data to ensure that decisions are based on timely data.
The US Market
Nvidia (NVDA) ended the market session down -$4.88 or -1.57% to close at $306.88 with a volume of 35.6M shares changing hands. Today, Nvidia and Microsoft (MSFT), the two biggest names in artificial intelligence right now, said Tuesday that they will collaborate on Artificial Intelligence work. Nvidia reports earnings tomorrow. The earning and guidance could have a big impact on the chip sector and AI-related stocks.
Palo Alto Networks PANW declined -3.37% or -$4.90 to close at $189.74 at the close of market session earlier today. The stock rose solidly in the afterhours market after the company topped expected views and and revenue prediction was in line. The cybersecurity firm guided slightly higher for Q4 EPS.
Growth stocks declined heavily today. Chipotle Mexican Grill Inc. declined -$54.93 or -2.61% today to close the market session at $2,047.01 with a volume of 352.2k shares traded. Mongodb Inc. (MDB) declined -$10.48 or -3.70% to close at $272.81 with 1.5M shares traded.
Regular Market Day Features
Beginner Investor’s (Canadian stocks) Watchlist
The Canadian Vanguard Chinese Stocks Watchlist
EV, Energy and Resource Stocks Watchlist at Today’s Market
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