Ameriprise fell about 4% after a BofA downgrade tied to advisor departures
Canada’s main stock index slipped on Monday even as a rebound in technology shares lifted Wall Street, leaving Canadian investors with a divided picture ahead of next week’s Bank of Canada rate decision.
The S&P/TSX composite index fell 247.92 points, or 0.69%, to 35,928.63, The Canadian Press reported. The Canadian dollar traded at 70.94 US cents, up from 70.65 on Friday. Financials and mining stocks led the decline, Baystreet reported, while energy names such as Vermilion Energy and Spartan Delta gained. The index remains below its August record of 37,069.11, according to Trading Economics.
Investors were also weighing September inflation of 3.1%, which was just below economists’ 3.2% forecast, according to Reuters. The Bank of Canada’s policy rate stands at 2.25%, and Governor Tiff Macklem has said the Bank expects to raise its inflation forecast significantly when it releases new projections on October 28.
South of the border, the Nasdaq Composite rose 1.11% to 26,430.89, and the S&P 500 added 0.41% to 7,690.73. The Dow Jones Industrial Average slipped 36.38 points, or 0.07%, to 51,966.03, Reuters reported. Weakness in JPMorgan Chase weighed on the Dow, according to market newsletter CappNotes, while Amazon gained about 5%.
Tech rebounds after a rout
Chip and artificial intelligence shares recovered after a sharp sell-off last week that Wealth Professional reported was the Nasdaq’s worst since June. Goldman Sachs data showed global hedge funds cut their tech exposure at the fastest rate on record, which analysts said left room for a bounce.
The rebound does not settle questions about AI spending. Gartner forecasts that more than US$3.5 trillion of AI infrastructure investment could be at risk of impairment by 2030, CIO reported. Gartner estimates AI data centre owners would need US$8.5 trillion in revenue to cover announced spending, but expects no more than US$3.6 trillion.
Among individual stocks, Intel rose about 2.4% after JPMorgan upgraded it to neutral from underweight, and Micron Technology gained nearly 3%. Advanced Micro Devices also advanced.
Ameriprise Financial fell about 4% after Bank of America (BofA) Securities double-downgraded the wealth manager to underperform from buy and cut its price target to US$445 from US$570, CNBC reported. CNBC said BofA pointed to several large advisor teams leaving the firm. Advisors and firm leaders may want to watch the story for client-retention and recruiting trends.
China data and an oil split
China’s economy grew 4.5% year over year in the third quarter, ahead of the 4.4% economists expected and up from 4.3% in the second quarter, according to National Bureau of Statistics data. Exports were a key driver, while domestic demand remained weak.
Oil prices sent mixed signals. Brent crude settled 31 cents, or 0.3%, lower at US$109.55 a barrel after falling more than US$3 earlier in the session, Reuters reported. West Texas Intermediate’s front-month contract rose 2.2% to US$103.66, but trading was thin ahead of its October 20 expiry. The more actively traded December contract fell 0.5% to US$98.54, which matters for Canadian energy investors tracking the benchmark.
Traders weighed renewed Houthi attacks on Saudi energy sites and tanker incidents near the Strait of Hormuz against a US decision to waive some sanctions on Russian energy exports. Ukrainian strikes on Russian refineries have also kept fuel markets tight.
