TORONTO 鈥� Tuesday鈥檚 mixed performance in North American markets was part of what one analyst says is a more reserved investing environment after concerns around new COVID-19 variants caused a big sell off last week.
Greg Taylor, chief investment officer of Purpose Investments, said that while markets have largely recovered from last week's selloff, investors remain cautious and equity performances aren鈥檛 as bullish as in previous months.聽
"When we had that fairly big selloff, people had started to question whether the market had gotten ahead of itself," said Taylor, saying there were concerns that lockdowns may not end as quickly as first expects.
The S&P/TSX composite index closed up 8.39 points at 20,173.35.
In New York, the Dow Jones industrial average was down 85.79 points at 35,058.52. The S&P 500 index was down 20.81 points at 4,401.49, while the Nasdaq composite was down 180.13 points at 14,660.58.
In the U.S., Taylor said this week鈥檚 performance will likely depend on reaction to tech sector earnings reports, with strong results Tuesday evening from Apple Inc., Microsoft Corp. and Alphabet Inc.
Facebook Inc. and Amazon.com Inc. report on Thursday.
"That's going to really be what drives the market for the rest of the week," said Taylor.聽
He pointed out tech stocks were down a "fair bit" Tuesday, with investors concerned about how those earnings reports will perform before the first results were made public.聽
There are also concerns from Asian markets as China clamps down on its own tech sector with stronger regulations than expected.聽
Apple's shares were down 1.49 per cent Tuesday and Amazon was down 1.98 per cent.
The U.S Federal Reserve will also meet Wednesday, and their tone around support for the economy could also have an effect on the market.
""Given some of the concerns around the variant ... I'm expecting a dovish meeting for tomorrow," said Taylor.
The cautious sentiment reverberated in the commodities market.
Gold prices had a modest increase of 60 cents at US$1,799.80 an ounce as the metal continues to hover around the $1,800 mark.
Taylor said the current market environment has caused investors to look to U.S treasury notes instead, with the 10-year bond yield finding some footing around the 1.25 per cent range after moving more than usual in recent months. The rate sat at 1.241 per cent Tuesday.
In other commodities, the September copper contract was down 4 cents at US$4.54 a pound.
The September crude oil contract was down 26 cents at US$71.65 per barrel and the September natural gas contract was down 14 cents at US$3.94 per mmBTU.
Energy stocks were down in Canada as a result, with the TSX's energy index down 2.64 per cent.聽
The Canadian dollar was also down slightly, trading for 79.50 cents US compared with 79.69 cents US on Monday.
This report by The Canadian Press was first published July 27, 2021.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Salmaan Farooqui, The Canadian Press
