North American markets concluded a painful week by closing well in the red Friday on a busy day of trading as crude oil prices sank and the loonie hit a 19-month low.
A variety of concerns drove investor actions, including heightened rhetoric from U.S. President Donald Trump that an impending partial government shutdown could be lengthy.
Risk is elevated these days and Friday was a perfect example of the many potential vulnerabilities for people, said Ian Scott, an equity analyst at Manulife Asset Management.
“We’re kind of in a bit of a free fall right now until we get some resolution on some of these things,” he said in an interview.
The S&P/TSX composite index lost 206.33 points to end at 13,935.44 after hitting an intraday low of 13,924.38. The Toronto market lost almost 660 points or 4.5% in one week and 8.3% in December with just four trading sessions remaining in the year.
Scott said a short-term market bounce remains a possibility in the coming days, but the year appears to be a writeoff.
“We’ve come to that conclusion ourselves.”
All sectors lost ground on the day, led by technology and cannabis-heavy health care. Shopify Inc. fell 3.3% in line with tech losses in the United States.
They were followed by the influential financial, energy and industrials sectors. Energy was down 1.9% as the February crude contract was down 29¢ at US$45.59 per barrel and the February natural gas contract was up 22.4¢ at US$3.75 per mmBTU.
The Canadian dollar traded at an average of US73.71¢ compared with an average of US74.10¢ on Thursday. It’s down more than a cent this week.
Consumer discretionary, consumer staples and materials were least impacted.
The Stars Group Inc. was a strong performer on the day, gaining 7.25% after the Kentucky Court of Appeals reversed a US$870-million lower court ruling against the online gaming company.
In New York, the Dow Jones industrial average closed off 414.23 points at 22,445.37. The S&P 500 index was down 2%, falling by 50.84 points at 2,416.58, while the Nasdaq composite was down 3% or 195.41 points at 6,332.99.
The February gold contract was down US$9.80 at US$1,258.10 an ounce and the March copper contract was down US2.25¢ at US$2.67 a pound.
The day started up on hopeful signs from China after a policymaker said its monetary policy would be “prudent” in 2019 and its fiscal policy “proactive.” It was followed by dovish comments from New York Fed president John Williams.
But things soured as Trump talked about a government shutdown.
The markets also felt pressure from heavy trading that accompanied the so-called quadruple witching day when options and futures expire, said Scott. Volume on the Dow was 900 million, up from a daily average of 364 million.
“Any time there’s a quadruple witching day you’ll see elevated volumes which I think can just lead to more volatility.”