Triple-digit losses to kick off April

TORONTO stock markets followed the worst first quarter since the 2008 financial crisis with an April 1 that was no joke.

Markets each sustained triple-digit losses following U.S. President Donald Trump’s gloomy outlook about the severity and duration of the COVID-19 pandemic.

In a news conference Tuesday, he warned of a “very, very painful two weeks” ahead and 100,000 to 240,000 deaths predicted in the months to come.

Trump’s pushback against hopes for a start to the recovery also weighed on investor sentiment, said Greg Taylor, chief investment officer of Purpose Investments.

“I think there was some optimism that things could start to reopen by the end of April. And now people are saying it’s going to be a lot longer and into the summer,” he said in an interview.

In addition, Taylor said some rebalancing that typically comes with the period surrounding the end of the quarter and month exceeded expectations.

The S&P/TSX composite index closed down 516.82 points or nearly four per cent to 12,861.93.

In New York, the Dow Jones industrial average was down 973.65 points at 20,943.51. The S&P 500 index was down 114.09 points at 2,470.50, while the Nasdaq composite was down 339.52 points at 7,360.58.

Investors will be watching closely for some corporate guidance as the earnings season begins in the next few days.

While many companies have revised their outlooks downward in light of the impact of the novel coronavirus, some have done better in this environment.

Certain tech companies are benefiting as people adapt to working from home while the use of the internet and streaming services have accelerated.

“So there’ll be a few companies that will offer good, good numbers,” Taylor said.

And some retailers may be able to prove that their business models work as consumers have hoarded or stocked up ahead of being locked down in their homes to curtail the spread of the virus.

“We need to start separating between winners and losers and figure out what companies can actually weather the storm and come out stronger on the other side.”

The Canadian dollar traded for 70.34 cents US compared with an average of 70.49 cents US on Tuesday.

Ten of the 11 major sectors of the TSX were lower with heavyweight financials down more than five per cent after enjoying a bit of a bound in the last few days. Shares of CI Financial Corp. and Genworth MI Canada Inc. were down 10.9 and 10.5 per cent respectively.

The May crude contract was down 17 cents at US$20.31 per barrel and the May natural gas contract was down 5.3 cents at US$1.59 mmBTU.