North American stock markets in the red

It’s the sixth negative session in a row for the commodity-heavy TSX after hitting a record high last week.

“When you look at the TSX, it’s just a continuation of the weakness we’ve seen over the past week,” said Macan Nia, senior investment strategist at Manulife Investments.

“The weakness has been driven mainly by the sell-off in the commodity complex from oil, to base metals to really gold as well.”

On Wednesday, the December crude contract retreated US37¢ to US$55.33 per barrel and the December natural gas contract was down US2¢ to US$3.08 per mmBTU.

The December gold contract fell US$5.20 to US$1,277.70 an ounce and the December copper contract gave back US2¢ at US$3.08 a pound.

Nia linked depressed commodities prices to a host of factors, particularly a slowing Chinese economy that has performed weaker than the markets have expected. “And as goes the Chinese economy so follows the commodity complex, and so follows the TSX,” he said.

A report from the International Energy Agency pointing to strong production growth in the years ahead, particularly in the U.S., has also weighed on oil prices this week.

“Despite the equilibrium between demand and supply coming closer over the past couple of months, there are more signs that we’ll get more supply coming on and that will tilt the balance to more supply than we need,” Nia said.

On the Canadian corporate front, shares of Home Capital Group Inc. were up 3.34% to $14.85 at the closing of markets after the struggling mortgage lender reported third-quarter net income of $30 million, about half of what it earned in the year-ago period before it was hit with allegations it misled investors.

Obsidian Energy Ltd. also got a boost, with its stock up 6.08% to $1.57, after the oil and gas company said it had reached a US$8.5-million settlement with the U.S. Securities and Exchange Commission over fraud-related charges filed earlier this year.

Meanwhile, Loblaw Companies Ltd. saw a meagre increase in its shares after the grocery and pharmacy giant announced plans to close 22 unprofitable stores by the end of the first quarter in 2018.

South of the border, U.S. stock indices were also negative on Wednesday as investors watched a batch of economic data, while keeping an eye on Washington as lawmakers began to push a tax cut bill through Congress.

The U.S. Labor Department said that consumer prices edged up 0.1% last month, the smallest gain in three months. The Commerce Department said retail sales rose 0.2% in October. And a closely watched report by the Federal Reserve Bank of New York showed manufacturing expanded at a slower pace this month in New York, but remained at a healthy level.

In New York, the Dow Jones industrial average tumbled 138.19 points to 23,271.28. The S&P 500 index gave back 14.25 points to 2,564.62 and the Nasdaq composite index dropped 31.66 points to 6,706.21.

“In the U.S. the markets are just taking a breather. We’ve had a very good return profile in 2017 and we haven’t had volatility this year,” noted Nia.

“I think that if we do not see a pullback from the peak of greater than 5% by the end of the year, this will be only the second year in 30 years that we haven’t had at least one 5% pullback.”

In currency markets, the Canadian dollar was trading at US78.29¢, down 0.25 of a U.S. cent.

With files from The Associated Press