North American markets plummet ahead of potential recession

The Canadian press

Published Tuesday, December 4, 2018 5:37 PM EST

Last Updated Tuesday, December 4, 2018 5:40 PM EST

Toronto – North American markets plummeted Tuesday as a bond market move signalized a potential recession ahead, promoting declines in the key industries, energy and financial sectors.

The two-and-three-year treasury notes surprised five-year notes in a partial wear curve, which often portends a recession in the years to come, says Craig Jerusalim, file manager at CIBC Asset Management.

"The market assumes that with higher risk of recession and as a result of risk assets are being sold over the board," he said.

In addition, the two and 10-year traffic journals are shouting to their nearest range since 2007.

Historically, an inversion of those notes typically occurs 6-12 months ahead of a recession.

"This partial inversion does not necessarily mean that the clock started to tick as much," he said in an interview. "It's a potential signal for what may come."

In addition, markets fell on a dumping of enthusiasm in China. Trade commerce Further comments from both sides and ongoing breaks on Brexit, Gerusalim added.

The S & P / TX Composite Index suffered the largest daily loss in six weeks as it closed down from 211.39 points to 15,063.59.

All sectors but telecommunications and utilities fell, carried by 4.59 per cent by health care, followed by industries, energy, technology, consumer discretionary and financial.

Health care dropped as Afria Inc. Shares fell by another 21 per cent in the wake of a short-sellers saying that targeted its recent Latin American acquisitions and raising questions about its operations in the area.

Despite strongly quarterly results, BMO shares closed when the bank did not reach its operating level targets.

Meanwhile, Teck Resources Ltd. Increased 2.1 per cent after selling a stake in his Chilean copper mine project that will allow the Vancouver company to keep cash running positive.

Also partially offset the declines on the bumps are higher prices for oil and gold.

The January gross contract was up to 30 cents at $ 53.25 per barrel and the January natural gas contract was 11.8 cents at US $ 30. It. $ 4.46 per MMBTU.

The February gold contract is up to US dollars. It. $ 7.00 It. $ 1,246.60 An ounce and the March copper deal was down 5.05 cents at US $ 2.76 a point.

The Canadian dollars traded at an average of 75.65 cents. It. Compared with an average of 75.81 cents US $. It. On Monday.

In New York, the Dan Jones industrial average dropped 3.1 per cent by losing 799.36 points at 25,027.07. The S & P 500 index was 90.31 points at 2.700.06, but the NASDAQ composite lost 3.8 percent or 283.09 points to 7,158.43.

Potential negative catalysts to come are another U.S. Federal Reserve rate hike and a job report on Friday. US It. Markets are closed Wednesday for a national day of mourning for former President George HW. Bush.

"Investors have been jittering the total earnings period," Jerusalim noted.

"Any company that showed no signs of disappointment was overwhelmed, and I believe that this is only one indication that the market does not have high confidence and the value of the contracts has already been contracted and is likely to be next."

Source link