TORONTO — North American stock markets took a break from COVID-19 vaccine enthusiasm amid concerns around rising infections and expanding lockdowns.
On Monday, markets reached multi-month or record highs after Moderna joined Pfizer a week earlier in announcing that their coronavirus vaccines were more than 90 per cent effective in trials.
The euphoria was tempered a day later by new U.S. state lockdowns and retail sales that missed expectations.
And when you take that with a new state lockdowns being announced, there’s just concern that it’ll just be a tough remainder of the fall and winter until deployment begins for the vaccines, said Anish Chopra, managing director with Portfolio Management Corp.
“It just looks like the vaccine rally is taking a breather,” he said in an interview.
“When investors hear about the vaccine, they’re focusing more on the future, let’s say six months out, whereas if you look at the data that just came in, and when you look at the new lockdowns in certain U.S. states, it just looks like the near future will just be tougher.”
Retail sales grew 0.3 per cent in October but missed expectations for growth of 0.5 per cent, to suggest challenges over the rest of the year.
The S&P/TSX composite index closed up 58.25 points to 16,948.06. That’s about 1,000 points or 5.6 per cent off the record high reached last February.
In New York, the Dow Jones industrial average was down 167.09 points at 29,783.35 and The S&P 500 index was down 17.38 points at 3,609.55, while the Nasdaq composite was down 24.79 points at 11,899.34.
The Dow partially fell because shares of pharmacy chains like Rite Aid Corp. and CVS were down16.3 and 8.6 per cent, respectively, following Amazon’s decision to get into the U.S. online drug business.
Meanwhile, the Nasdaq composite fell near close after being up much of the day as Tesla shares gained 8.2 per cent on its impending inclusion in the S&P 500.
“There’s certainly buying demand for Tesla shares from index funds and then as a result of that from other funds,” said Chopra.
Energy, real estate and financials led the TSX as a slight rise in crude oil prices propelled shares of MEG Energy Corp., Cenovus Energy Inc. and Husky Energy Inc., which gained 4.1, 3.9 and 3.8 per cent, respectively.
The December crude contract was up nine cents at US$41.43 per barrel and the December natural gas contract was up half a cent at $2.70 per mmBTU.
Looking at the long term, there’s optimism around the world that economic growth will be back to normal in a couple of years. which is positive for oil and energy stocks, said Chopra.
“And if you look at energy stocks in particular, they’ve had a really tough run over the last number of years, so there’s certainly a positive backdrop for them.”
The Canadian dollar traded for 76.37 cents US compared with 76.42 cents US on Monday.
Financials were up 1.1 per cent even though U.S. bond yields dipped on concerns about a slowing economy for the rest of the year. Royal Bank of Canada shares rose 1.7 per cent.
Real estate gained 1.2 per cent.
Materials was down the most on the day, falling 0.9 per cent on lower gold prices with New Gold Inc. down 3.3 per cent.
The December gold contract was down US$2.70 at US$1,885.10 an ounce and the December copper contract was down 2.4 cents at US$3.20 a pound.
This report by The Canadian Press was first published Nov. 17, 2020.
Companies in this story: (TSX:NGD, TSX:RY, TSX:MEG, TSX:CVE, TSX:HSE, TSX:GSPTSE, TSX:CADUSD=X)
Ross Marowits, The Canadian Press