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Daily Markets Update: Tech Rout Hammers Global Markets as Micron Earnings Loom

  The TSX slipped below 35,000, the Nasdaq shed more than 2%, and South Korea's chip-heavy KOSPI cratered 10% — all before Wall Street's eyes shift to Micron Technology's pivotal earnings report after today's close. Market Snapshot (June 23 Close & June 24 Early Signals) Index / Asset Level Change S&P/TSX Composite 34,927 ▼ 0.2% S&P 500 7,365.46 ▼ 1.44% Nasdaq Composite 25,587.04 ▼ 2.21% Dow Jones Industrial Avg. 51,666.84 ▼ 0.09% KOSPI (South Korea) — ▼ 9.99% Stoxx 600 (Europe) — ▼ ~1.0% WTI Crude Oil $72.06 / bbl ▼ 1.6% Brent Crude $75.86 / bbl ▼ 1.6% Gold (futures) $4,082.20 / oz ▼ 1.62% Silver (futures) $61.49 / oz ▼ 1.65% June 23 official closes. June 24 intraday/futures data where noted. All figures in USD unless stated. 🇨🇦 Canada: TSX Falls Below 35,000 The S&P/TSX Composite Index lost ground for the second consecutive session Tuesday, falling 0.2% to close at 34,927 — a retreat below the closely watched 35,000 mark. The selloff was broad-based...
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Canada’s economy shrinks in Q3 amid export and consumer woes

 


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Canada’s economy shrinks in Q3 amid export and spending woes

Canada’s economy contracted by 1.1 per cent on an annualized basis in the third quarter of 2023, according to Statistics Canada. This was a much weaker result than expected by analysts and the Bank of Canada, which had forecast a slight growth of 0.1 per cent and 0.8 per cent, respectively.

The main factors behind the economic decline were a drop in exports, a slump in business investment, and a stagnation in consumer spending. Exports fell by 5.1 per cent, reflecting lower shipments of energy products, motor vehicles, and aircraft. Business investment decreased by 10.1 per cent, as firms reduced their spending on machinery and equipment, intellectual property, and non-residential structures. Consumer spending was flat, as households saved more of their income amid rising interest rates.

The only bright spots in the third quarter were government spending, which increased by 7.3 per cent, boosted by a one-time GST/HST credit payment, and residential housing investment, which rose by 8.3 per cent, driven by a surge in new construction.

The Canadian economy also performed poorly compared with the U.S. economy, which grew by 5.2 per cent in the same period. Canada has been more sensitive to the impact of higher interest rates, which have been raised by the Bank of Canada to 5 per cent from 0.25 per cent since early 2022. The central bank has recently signalled that it may pause or reverse its tightening cycle, as inflation has eased and economic growth has faltered.

Some economists believe that the third quarter contraction was a temporary setback and that the economy will rebound in the fourth quarter and beyond. Statistics Canada estimated that GDP grew by 0.2 per cent in October, indicating a modest recovery. However, others warn that the economy may face more headwinds in the new year, such as the ongoing supply chain disruptions, the spread of the new COVID-19 variant, and the uncertainty over the federal fiscal policy.

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