TSX down 1 per cent as global concerns weigh
Global equities declined Tuesday as investors sought safe havens amid a cocktail of concerns. Oil prices continued to fall on oversupply fears; gold turned lower as the US dollar strengthened; and data from China and the Eurozone showed weakness.
Toronto’s main equity index fell more than 1 per cent as energy stocks weighed but the sector led a wide-ranging decline.
It was a similar story on Wall Street and most European and Asian markets closed lower too.
The S&P/TSX Composite Index closed down 158.0 (1.14 per cent)
The Dow Jones closed down 140.3 (0.78 per cent)
Oil is trending lower (Brent $45.08, WTI $43.71 at 4.20pm)
Gold is trending lower (1288.90 at 4.20pm)
The loonie is valued at U$0.7857
CIBC World Markets issues bank warning
Analysts at CIBC World Markets have warned that the big banks are only just starting to show the real impact of lower oil prices. Canadian Western Bank reported that it was expecting oil-related credit losses, and CIBC said Tuesday that the oil-related credit cycle has “only just begun” following a lag. Economist Rob Sedran commented in a note that Canadian Western’s outlook “confirms that all of the banks are hardly out the other side.”
BC may never see LNG plant
An economist with Calgary’s FirstEnergy Capital believes that the long-talked-about LNG plants for British Columbia may never happen. Martin King told the CBC that by now “a lot of these projects should have been off the ground or under construction,” but that with prices for LNG having collapsed it could be at least 2020 before decisions are made on whether to invest in the projects.
Major auto makers report sales gain in April
Ford and Fiat Chrysler reported stronger sales in Canada in April. There was a 10 per cent gain year-over-year for Fiat Chrysler and 11 per cent for Ford; both manufacturers saw strong demand for trucks. Fiat Chrysler Canada’s COO Dave Buckingham told Reuters “We’re off to the best sales start in history.”