The S&P/TSX Composite closed Friday at 35,226.14, down 279.70 points or 0.79 percent, as a 1.3 percent drop in gold dragged the materials group down 3 percent and technology fell 2.6 percent. The index still finished July up 1.1 percent, its fourth consecutive monthly gain. Markets were then closed Monday for the Civic Holiday, and Tuesday's reopening inherits a commodity backdrop that has moved in the opposite direction from the one that shaped Friday's session.
Gold is trading near 4,110 US dollars an ounce this morning, up roughly half a percent, after President Trump's cancellation of a planned Iran strike over the weekend kept haven demand supported even as the broader "deal is close" narrative frayed by Monday. WTI crude has clawed back part of its own weekend drop, trading near 81.30 US dollars this morning versus Friday's close above 84.60, according to Investing.com.
Why Friday's Drag Looks Like Tuesday's Setup, With One Exception
Agnico Eagle, Barrick and Wheaton Precious Metals were Friday's biggest single-stock losers, falling more than 3 percent and over 2 percent respectively as gold weakened and the US dollar rebounded from a more than one-month low. A firmer gold price this morning points the other way for that group heading into the open. Energy is the exception. WTI remains below where it closed Friday even after this morning's rebound, so Imperial Oil and Enbridge, both down Friday on a mix of earnings reaction and the broader commodity move, do not have the same clean setup working in their favour.
Friday's session was driven by a small number of large individual moves rather than a broad market-wide decline, and TELUS accounted for more of the point drop than any other name.Agnico Eagle, Barrick, Wheaton Precious Metals and Enbridge are shown at the stated floor of their reported move (more than 3 percent, over 2 percent, over 2 percent and more than 0.5 percent respectively). All other figures are as reported.
TELUS Is Still the Name to Watch
TELUS fell 11.27 percent to 13.38 dollars Friday after resetting its quarterly dividend 55 percent alongside a 2.1 billion dollar non-cash impairment and a 1.83 billion dollar net loss, drawing downgrades from Morgan Stanley, CIBC and Barclays. That single name accounted for more of Friday's point decline than the entire materials group's percentage move would suggest, given TELUS's index weight. With the stock now trading well off its pre-cut range, the question for Tuesday's session is whether the sharpest of the reaction is behind it or whether downgrade-driven selling continues into the new week.
What Tuesday Inherits From Monday
US benchmarks closed at fresh records Monday while the TSX sat out the session for the Civic Holiday. The Dow and S&P 500 both finished at all-time highs, and futures were pointing higher again early Tuesday. That leaves Canadian markets to price a firmer US tape, a reversed gold trade and a still-soft oil price all in the same opening session, a combination that has not been reflected in the TSX Composite level since Friday's close.