TSX Slides Below 15000 Points With Healthcare, Energy, Shouldering Hefty Losses
The TSX has fallen nearly 160 points and is now under 15,000 points with all sectors bar utilities (+0.34%) in the red.
The biggest decliners are healthcare (-2.64%) and energy (-1.76%).
According to CIBC's Avery Shenfeld, in his Week Ahead note, it would take a lot for Wall Street to derail the US economy itself. Given how steep the S&P had been climbing, investors have thus far only shed two months of gains. The more broadly based sources of spending power, jobs and wages, are still holding up. Business capital spending coming from new equity issuance could be impacted, but there was a lot of fuel for cap-ex in the tax cut package.
For Canadians, the story is different, Shenfield points out. Fiscal policy isn't likely to be a big net stimulus. The recent TSX dive has wiped out last year's gains in their entirety. Single family house prices also look to be cooling in the face of tighter mortgage regulations. So the Bank of Canada will at least have to look at whether the overall wealth effect is further reason to do what CIBC already expected: wait until summer before hiking again, by which time the asset price story will have greater clarity.
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