TORONTO — North American stock markets were flat Monday as investors stayed the course in spite of the weekend's turbulence in Afghanistan and the kick-off of a Canadian federal election campaign.
Craig Fehr, investment strategist with Edward Jones, said Monday was characterized by low trading volumes and little volatility in equity pricing. This came in spite of ongoing geopolitical turmoil in Afghanistan as the Taliban seized Kabul, as well as domestic uncertainty brought about by Sunday’s announcement by Canadian Prime Minister Justin Trudeau that the country will go to the polls Sept. 20.
“Those are typically some events that can cause some knee jerk reaction in the market, and yet, equities haven’t reacted sharply,” Fehr said. “It was a very, very quiet day today, which is consistent with what we saw for the entirety of last week and much of August.”
The S&P/TSX composite index was down 34.65 points at 20,483.42.
In New York, the Dow Jones industrial average was up 110.02 points at 35.625.40. The S&P 500 index was up 11.71 points at 4,479.71, while the Nasdaq composite was down 29.14 points at 14,793.76.
The Canadian dollar traded for 79.56 cents US compared with 79.91 cents US on Friday.
The September crude oil contract was down US$1.15 at US$67.29 per barrel and the September natural gas contract was up 8 cents at US$3.95 per mmBTU.
The December gold contract was up US$11.60 at US$1,789.80 an ounce and the September copper contract was down six cents at US$4.33 a pound.
Fehr said it’s normal for markets to be quiet in the dog days of summer. In addition, he said, fundamentals remain quite positive, which may be preventing investors from being spooked by the political situation in Afghanistan, the ongoing concerns about the Delta variant, or the upcoming Canadian election.
“We’ve got a U.S. and Canadian, and frankly a global, economy that — while proceeding in fits and starts — is still very much on the road to recovery,” Fehr said. “So it’s not overly surprising we would see equities look past a little bit of geopolitical uncertainty.”
Still, Fehr said he doesn’t expect the current market stability to continue indefinitely. He said it’s likely some investors are in a holding pattern waiting for the end of summer, which will likely bring with it an expected decision from the U.S. central bank on tapering off bond purchases.
“I do think as we transition into the fall and people come back from vacation, we’re probably going to see some element of volatility and larger market swings come back into the picture,” Fehr said.
This report by The Canadian Press was first published Aug. 16, 2021.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Amanda Stephenson, The Canadian Press