The Toronto Stock Exchange and New York Stock Exchange Follow Downward Trend

MARKET REVIEW. The Toronto Stock Exchange lost ground in the middle of the day on Tuesday, following in the footsteps of the main New York indices.

The New York Stock Exchange was down sharply on Tuesday, concerned about weak trade data from China and a downgrade of several US banks.

To (re)consult market news

Stock market indices at noon

In Toronto, the S&P/TSX decreased by -118.95 points (-0.58%) to 20,118.72 points.

In New York, the S&P 500 lost -47.13 points (-1.04%) to 4471.07 points.

The Nasdaq fell -202.47 points (-1.45%) to 13,792.62 points.

The DOW fell from -333.39 points (-0.94%) to 35,139.74 points.

The loon fell -0.0043$ (-0.5699%) to 0.7432$.

The oil was down -0.35$ (-0.4271%) to 81.59$.

L’or dropped -$9.60 (-0.49%) to $1,960.40.

The bitcoin was up +US$728.16 (+2.56%) to US$29,536.55.

Context

“The market had a good day on Monday (…) despite little trading. There is still a chance that it will be the case on Tuesday, but it does not start well at the opening”, admitted Patrick O’Hare of Briefing.com. “This rebound reversal is triggered by several factors all related to growth issues,” the analyst added.

China first released disappointing trade data, including a 14.5% drop in exports year on year in July and a 12.4% decline in imports, the fastest contraction in two years.

On the US foreign trade side, exports and imports in June were weaker than the previous month.

On another front, a warning from ratings agency Moody’s on Monday evening downgraded the rating of a dozen small US banks, citing risks associated with their exposure to commercial real estate, including M&T Bank. Several large banks are also placed under surveillance by the rating agency, including Bank of NY Mellon and State Street.

“Given that Moody’s predicts a recession in the United States in the coming year, the level and quality of bank capital will be essential to their ability to resist,” said the agency.

Ten of the eleven S&P 500 sectors were in the red, with Materials, Energy and Banks lagging behind.

Regional banks, already at the center of concerns in the spring after the bankruptcy of Silicon Valley Bank, fell sharply as PacWest Bancorp (PACW, -3,64%), Western Alliance (WAL, -4,04%) or Zions Bancorporation (ZION, 5,43%). Big banks also suffered, with Morgan Stanley, Goldman Sachs, Citigroup and JPMorgan all losing more than 2%.

In terms of company results, announcements ofUPS have had the effect of a cold shower as the express carrier lowered its forecast for 2023 after a salary agreement with its drivers.

The group, which employs more than 500,000 people worldwide, announced that it now anticipates annual sales of around 93 billion (G) US dollars (US), against around 97 US$ billion previously, and an adjusted operating margin around 11.8% (12.8% previously). The title fell by 1.61%.

The title ofEli Lilly (LLY) soared more than 14% after the pharmaceutical company raised its annual forecast and posted a better-than-expected quarterly result, thanks to strong demand for its weight-loss diabetes drug Mounjaro.

Paramount Global (PARA)whose stock had climbed almost 3% the day before in anticipation of the announcement of the sale of the publishing house Simon and Schuster for US$1.6 billion to KKR, gave up the ground gained (FOR, -3.33%).

On the bond market, rates on ten-year bills fell below 4% for the first time in almost a month.

A US central bank (Fed) official, Patrick Harker, said interest rates could remain stable at the next meeting in September if the economy maintains its trajectory.