TORONTO — Canada's main stock index moved lower on Friday, as companies and organizations around the world grappled with outages stemming from a faulty CrowdStrike software update, while U.S. stock markets also fell.
Friday saw a continuation of the downward moves over the past few days on Wall St., said Ian Chong, portfolio manager for First Avenue Investment Counsel Inc.
The global IT outage likely contributed to the downward pressure on markets, he added.
A major outage stemming from a faulty update sent by cybersecurity firm CrowdStrike to Microsoft Windows computers disrupted flights, banks and more around the world.
CrowdStrike’s stock dropped 11.1 per cent Friday.
The S&P/TSX composite index closed down 36.37 points at 22,690.39.
In New York, the Dow Jones industrial average was down 377.49 points at 40,287.53. The S&P 500 index was down 39.59 points at 5,505.00, while the Nasdaq composite was down 144.28 points at 17,726.94.
Markets have been reacting this week to uncertainty stemming from the looming U.S. election, said Chong, as investors grapple with the potential policy implications.
President Joe Biden has made some comments about getting tougher on exports to China, he said, while this week Donald Trump gave an interview to Bloomberg in which he made comments about the U.S. protecting Taiwan.
“To be fair, there was a little bit of rotation starting even before that ... but that really picked things up,” said Chong.
Beneath the surface, breadth on the market has continued to improve, he said, as investors branch out into some of the market’s “laggards,” particularly outside of tech.
“We would view this as supportive of a healthy market.”
U.S. earnings will really get going next week, said Chong, with Google among the major names set to report.
Expectations for earnings are “robust,” he added, noting that despite a gradual slowing in the market under the weight of interest rate hikes, “the narrative of a soft landing seems more and more plausible.”
The U.S. Federal Reserve is expected to announce its first rate cut in September, with another potential cut before the end of the year.
Meanwhile, next week brings the latest interest rate decision from the Bank of Canada, which is widely expected to cut its key interest rate for a second time this year.
The Canadian dollar traded for 72.85 cents US compared with 73.01 cents US on Thursday.
The September crude oil contract was down US$2.66 at US$78.64 per barrel and the August natural gas contract was unchanged at US$2.13 per mmBTU.
The August gold contract was down US$57.30 at US$2,399.10 an ounce and the September copper contract was down four cents at US$4.24 a pound.\
— With files from The Associated Press
This report by The Canadian Press was first published July 19, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
