TSX ends three-day winning streak

TORONTO — Canada’s main stock index ended a three-day winning streak despite crude oil futures closing at a three-month high. The S&P/TSX composite index closed down 47.24 points at 15527.87, which is still up 2.2 per cent for the week.

In New York, the Dow Jones industrial average was up 11.93 points at 26281.82. The S&P 500 index was down 10.52 points at 3112.35, while the Nasdaq composite was down 67.10 points at 9615.81.

“I still think the bias of this market is going to be to grind higher. But you’re probably going to get days like this where you just get a little bit of consolidation after a couple of really strong days,” said Mike Archibald, vice-president and portfolio manager with AGF Investments Inc.

The positioning in the markets is very defensive even though markets are down as sectors that have been “massive laggards,” such as energy, financials and REITs, outperformed on the day compared with technology and consumer staples, Archibald said.

“So all the parts of the market that had been left for dead as the market was recovering from the March lows, or what you were terming the reopening portfolio of sectors, is really acting quite well,” he said.

Real estate and energy were the leading sectors on the day.

Energy gained 1.4 per cent as Secure Energy Services Inc. surged 28 per cent while exploration names such as Vermilion Energy Inc., Baytex Energy Corp. and Suncor Inc. were up 4.8, 4.7 and 2.3 per cent respectively.

The July crude contract was up 12 cents at $37.41 US per barrel and the July natural gas contract was up 0.1 of a cent at $1.82 US per mmBTU.

The strong performance by exploration companies indicates that the market is looking forward to a potential deal by OPEC and Russia to extend production cuts, Archibald said.

“If you get positive news out of OPEC, energy has room to continue to move higher.”

The Canadian dollar traded for 74.03 cents US compared with 74.05 cents US on Wednesday.

Materials also increased as the price of gold rose. The August gold contract was up $22.60 US at $1,727.40 US an ounce and the July copper contract was up 0.2 of a cent at just under $2.49 US a pound.

Consumer staples, technology and consumer discretionary were the biggest laggards on the day.

The consumer sectors fell as shares of Alimentation Couche-Tard Inc., Saputo Inc. and Canadian Tire Inc. decreased 2.1 to four per cent.

Technology dropped 1.6 per cent as Shopify Inc. was the worst performer on the TSX, losing 3.6 per cent, or $36.78, to $992.55.

The Ottawa-based technology provider has lost its bragging rights as Canada’s most valuable company by market capitalization with the Royal Bank of Canada regaining the top spot.

Contributing to Shopify’s softness is the shift away from technology while some investors sold shares to crystallize profits.

Still, Archibald said the company hit a home run for most of 2020 as it surged from $500 to start the year to hit a high of $1,200 per share despite a 30 per cent market pullback.

“I think Shopify will probably be Canada’s largest company again,” he said.

“That may not happen in the very near term. It has a lot of good things going for it in terms of the types of names that I think are going to be long-term winners in Canada.”