Investors ‘pre-position’ companies for 2020
TORONTO — Year-end market positioning pushed Canada’s main stock index lower on a low-volume day at the Toronto Stock Exchange on Monday.
With the new year looming, investors were clearing the decks and getting ready for 2020, said Craig Jerusalim, senior portfolio manager for CIBC Asset Management. “If I sum up the market today, I would say that there’s a lot of pre-positioning going on, setting up for 2020,” he said.
“Specifically, there’s a lot of outperforming growth companies being rotated into the underperforming value companies — a little bit of selling the winners to buy the underperformers.”
In Toronto, the S&P/TSX composite index was down 69.65 points at 17,098.56, giving up some of its recent gains that resulted in a string of record highs.
Stocks also moved broadly lower on Wall Street on Monday, with the Dow Jones industrial average losing 183.12 points to close at 28,462.14 after a similar record-setting run in recent weeks.
The S&P 500 index was down 18.73 points at 3,221.29, while the Nasdaq composite fell 60.62 points to 8,945.99.
The Canadian dollar was at 76.58 cents US on Monday, compared with Friday’s average of 76.46 cents US.
“The energy and material stocks are higher, specifically a lot of the gold stocks are a lot higher due to a weaker U.S. dollar. The U.S. dollar seems to be giving back some of its earlier gains,” said Jerusalim.
“On the negative side, a lot of the interest-sensitive stocks seem to be underperforming, such as the utilities and pipelines, due to interest rates, as indicated by the 10year yield, moving higher.”
The February crude contract was down 13 cents at $61.59 and the February natural gas contract was down 4.3 cents at $2.19 per mmBTU.
The February gold contract fell 30 cents to $1,517.80 an ounce on Monday, and the
March copper contract was at $2.82 a pound, down 0.9 cents from Friday.
Monday was one of the biggest dates on the calendar for utility, pipeline and real estate companies going ex-dividend, said Jerusalim, which means their next dividend payout goes to the current owner even if the stock is sold to someone else.
Energy and mining stocks gained Monday in Toronto, while financial, health care, technology, industrials, telecoms and utilities sectors fell.
Oncolytics Biotech Inc., a Calgary-based company developing cancer treatments, continued to post big gains, jumping $1.42 or 39 per cent to $5.06 after recording a 52 per cent gain last Friday.
Shares in Restaurant Brands International Inc. closed down one per cent or 84 cents at $83.50. On Friday, after markets closed, the company announced that Alex Macedo, the president of its Tim Hortons subsidiary, will be stepping down in March after two years in the role.
The Toronto market is to be closed on Wednesday for New Year’s Day.
• Gateway Casinos and Entertainment Ltd. is expected to name a new chief executive following a proposed deal that will create a publicly traded company valued at nearly $1.5 billion.
Current Gateway chief executive Tony Santo will retire and be replaced as CEO and president by Marc Falcone, who has held a variety of executive positions at U.S. gaming and hospitality companies for more than a decade.
Falcone is currently director of Leisure Acquisition Corp., a special purpose acquisition company listed on Nasdaq that will be acquired by Gateway’s parent GTWY Holdings Ltd., which plans to have a New York Stock Exchange listing.
Under the transaction, Leisure’s shares will be converted into shares of GTWY and Leisure warrants will be exercisable into GTWY shares for $11.50 each. Leisure shares were at $10.40 at midday, up five cents from the previous close.