TSX lower as financials weaken
The main TSX index tracked losses for Wall Street Tuesday which was rattled by a surprising weak result from Goldman Sachs. Analysts had expected another strong performance from the financial giant but the missed forecasts for revenue and earnings.
Meanwhile, geopolitics continued its surprising route as British PM Theresa May called a snap general election. Tensions in the Middle East and North Korea were also weighed.
The financials group of Toronto’s main index closed flat as major banks lost value. Healthcare was the largest drag though with telecoms, energy, materials and utilities also lower.
Gains for IT – driven by a gain for Amaya Inc. – and small increases for industrials and consumer staples were not enough to offset losses and the overall index closed lower.
Wall Street closed with losses with the Dow off by 113 points; Europe and most Asian indexes closed lower.
The S&P/TSX Composite Index closed down 62.32 (0.40 per cent)
The Dow Jones closed down 113.6 (0.55 per cent)
Oil is trending lower (Brent $55.09, WTI $52.62 at 4.40pm)
Gold is trending lower (1291.40 at 4.40pm)
The loonie is valued at U$0.7465
New share issuance tempts foreign investors to record high
Foreign investment in Canadian securities hit a record high in February as new share issuances took the total to $38.8 billion with equities accounting for $35.9 billion.
Canadian investors focused once more on purchase of US instruments including $4.9 billion of US shares in which prices rose 3.7 per cent in the month. Total foreign securities bought by Canadian investors amounted to $6.3 billion, Statistics Canada reported.
Robots should be embraced says BoC’s Wilkins
The senior deputy governor of the Bank of Canada said Tuesday that despite the loss in the labour market, automation should be embraced.
Carolyn Wilkins said that there will be benefits to the Canadian economy from the increased use of automation and artificial intelligence, including raised productivity and higher living standards.
She said that modern history shows that as old jobs become obsolete, new ones are created but that the loss for the labour market and income distribution will need to be managed.
“Canada is well positioned to succeed in a digital world,” Senior Deputy Governor Wilkins said in a speech to the Toronto Region Board of Trade. “If we seek out and embrace new technologies while successfully managing their harmful side effects, we will create inclusive prosperity.”