Update: TSX Hit by Trump Announcement on Steel Tariffs, Falls 48 Points

Update: TSX Hit by Trump Announcement on Steel Tariffs, Falls 48 Points

North American stocks were roiled as March kicked off, hit by U.S. President Trump’s announcement he will slap a 25% levy on steel imports and 10% on aluminum imports. Although it’s not clear if Canada will be included, the TSX fell along with U.S. markets. The S&P/TSX Composite Index was down 48 points or 0.3% to close at 15,393. The three-day slide has further extended the year-to-date decline in the TSX to around 5%. U.S. markets were hit harder, with the Dow Jones dropping more than 420 points, or 1.7%.

With NAFTA negotiations ongoing, the move underpinned fears that a protectionist U.S. will insist on considerable concessions from Canada and Mexico in order to not walk away from the table. In a report, CIBC added the economic effects could be “more biting” for the Canadian economy than previous moves by the Trump administration.

Declines were across all TSX sectors, but led by consumer discretionary, industrials and tech, all off around 1%. Financials were modestly weaker while energy lost 0.7% with crude oil falling to $60.99, in part on the stronger dollar as well as the potential impact of a trade war on economic growth.

In stock news, TD Bank (TD.TO), the last of the big banks to report its quarterly earnings, rose more than 1% as profits rose along with the bank’s dividend. Stelco Holdings (STLC.TO) fell 4.5% following the Trump announcement on steel duties. First Quantum Minerals (FM.TO) was down 3%. Cannabis stocks were higher today, including heavily-traded Aurora Cannabis (ACB.TO), up nearly 3% and Canopy Growth (WEED.TO), up 7%.

In economic news, Canada’s current account deficit narrowed to -$16.4 billion in Q4 from a revised -$18.6 billion (was -$19.4 billion). The deficit was modestly smaller than expected in Q4 (median -$17.0 billion). A contraction in the goods deficit to -$7.2 billion in Q4 from -$9.0 billion in Q3 drove the narrowing in the total current account deficit, which was expected. The improvement in the nominal goods deficit will not be repeated in the real Q4 GDP report, as import volumes grew faster than export volumes, implying a modest drag from net exports on Q4 GDP, which is due Friday.

The Canadian dollar ended modestly higher at 78.03 US as earlier strength from the greenback was unwound late in the day after comments from Canadian Trade Minister Champagne, who said it was unclear whether the new Trump tariffs would be applied to Canada. Skeptics also noted that Trump has made outlandish statements in the past, but has not followed through.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.

Related posts