Canadian Stocks Show Modest Move To The Downside

After showing a lack of direction early in the session, Canadian stocks moved modestly lower over the course of the trading day on Tuesday.

The benchmark S&P/TSX Composite Index slipped 38.08 points or 0.2 percent to 21,217.53, giving back ground after inching up to its best closing level in well over a year last Friday.

Technology stocks followed the U.S. peers lower ahead of the release of quarterly results from Nvidia (NVDA) after the close of trading on Wednesday.

Reflecting the weakness in the tech sector, the S&P/TSX Capped Information Technology Index slumped by 1.6 percent.

Energy stocks also moved to the downside amid a steep drop by the price of crude oil, while considerable strength was visible among consumer staples stocks.

The choppy trading seen earlier in the day came as traders seemed reluctant to make significant moves ahead of the release of the minutes of the Federal Reserve’s latest monetary policy meeting on Wednesday.

“The minutes of the Federal Reserve’s January Federal Open Market Committee meeting may clarify how much more ‘good data’ the Fed’s policymakers want to see before starting to reduce interest rates,” said Bill Adams, Chief Economist for Comerica Bank.

He added, “Chair Powell said at the press conference following the January decision that he saw a March cut as unlikely, but was uncharacteristically vague about exactly what the Fed’s preconditions for cuts are; this suggests FOMC members still disagree about the issue.”

Ahead of the release of the minutes, CME Group’s FedWatch is currently indicating just an 8.5 percent chance the Fed will lower rates by a quarter point in March.

Statistics Canada released a report this morning showing its Consumer Price Index rose 2.9 percent on a year-over-year basis in January, down from a 3.4 percent gain in December. On a seasonally adjusted monthly basis, the CPI edged down 0.1 percent in January.

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