TSX pulls back from record highs, ‘meme stocks’ cool off

By Carl Garnich, The Canadian Press


S&P/TSX
0.32%
20,002.27
DOW
0.44%
34,447.14
S&P
0.18%
4,219.55
NASDAQ
0.09%
13,911.75
GOLD
0.1%
$1,895.50/oz
OIL
0.1%
$69.96/bbl

Markets at the 4 p.m. EST close on June 9, 2021

 

Investors hit the sell button on North American markets Wednesday. Canada’s main stock index and the new “meme stocks” lost ground.

The S&P/TSX Composite Index finished at a record for a third day in a row Tuesday as Wendy’s (WEN US) and Clover Health (CLOV US) joined the Reddit-fueled trading frenzy.

At the close, U.S. shares of Clover Health dropped more than 23 per cent. Wendy’s lost nearly 13 per cent.

Earnings action continued Wednesday with Dollarama and Campbell Soup in the spotlight.


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Dollarama finished in the red on Bay. Shares fell more than 1.7 per cent. Campbell Soup slid nearly 7 per cent.

Economists also digested the Bank of Canada’s decision to leave interest rates unchanged.

The central bank expects the country’s economy to rebound strongly starting this summer, led by consumer spending, as vaccinations proceed at a faster pace and provincial governments ease economic restrictions.

The rate has remained near-zero since the onset of the pandemic last year. The bank said it won’t increase the rate until the economy has recovered.

Deputy governor Timothy Lane is scheduled to discuss the decision in a speech Thursday.

The bank also says it will stay the course on its federal bond purchases for now, after tapering purchases just a few weeks ago citing improving economic conditions.

The purchases help drive down rates charged on mortgages and business loans.

The Canadian dollar traded for 82.68 cents U.S. compared with 82.67 cents U.S. on Tuesday.

CIBC senior economist Royce Mendes writes the bank chose not to make any waves of its own in financial markets with the third wave of the virus still winding down across the country.

The decision by the Bank of Canada comes as Ontario reports the smallest increase in new COVID-19 cases since September.

As the vaccine rollout continues to ramp up, the federal government announced Wednesday that fully vaccinated Canadian travellers no longer need to spend 14 days in quarantine upon arriving home.

A federal source familiar with the policy says the change will go into effect in early July.

Ottawa is also eliminating the need for fully vaccinated Canadian air travellers to spend three days quarantining in an authorized hotel upon arriving in the country.

Analysts believe the moves signal easier travel could soon resume between Canada and the United States.

After the federal government said they were taking step towards easing restrictions earlier this week, reports surfaced that an announcement could be made as soon as Friday.

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