TORONTO — North American stock markets fell back Tuesday with the prospect that Democrats were finally prepared to take steps towards the impeachment of U.S. President Donald Trump.
Markets started the day stronger on overnight tariff news out of China but dropped as reports surfaced that House Speaker Nancy Pelosi was willing to open an impeachment inquiry over suggestions that Trump may have sought a foreign government’s help in his re-election bid.
“Everything started as soon as that came out,” said Sid Mokhtari, executive director of institutional equity research at CIBC.
“You can certainly say the market did respond to it negatively and as soon as we started hearing the proceedings of impeachment, at least the thought processes of it coming on the table, the market did actually pick up a lot of downside selling pressure.”
The S&P/TSX composite index closed down 68.87 points at 16,798.33 after hitting an intraday high of 16,917.62.
Health care sustained the largest loss of the 10 major sectors on the TSX as several cannabis companies were in the red, including Cronos Group Inc. and Aurora Cannabis Inc.
The technology sector lost 2.54 per cent as BlackBerry stock fell 22.7 per cent after the company’s second-quarter revenue fell short of analyst estimates as it experienced difficulties in a legacy unit that sells software and services to businesses.
Energy was also lower with Encana Corp. and Crescent Point Energy Corp. dipping on lower crude oil prices as Saudi Arabia had restored a large share of its output damaged after attacks on its installations.
“It was surprising to hear how quick the response was and how quickly they are going to be able to actually put everything back in order,” Mokhtari said in an interview.
Materials rose with the price of gold. The December gold contract was up US$8.70 at US$1,540.20 an ounce and the December copper contract was down half a cent at US$2.61 a pound.
The Canadian dollar traded for an average of 75.48 cents US compared with an average of 75.36 cents US on Monday.
In New York, the Dow Jones industrial average was down 142.22 points at 26,807.77. The S&P 500 index was down 25.18 points at 2,966.60, while the Nasdaq composite was down 118.84 points at 7,993.63.
Stock markets have increased substantially during Trump’s presidency so any threat of his removal would hit investors hard, Mokhtari said.
“There’s a general consensus out there if there is impeachment and if there is potential of Mr. Trump being removed, this market would be susceptible to a severe correction.”
Trump’s tweet that he will release a transcript of his conversation with Ukraine’s president didn’t help markets recover. Trump allegedly pressed Ukraine to investigate Democratic presidential candidate Joe Biden and his son Hunter, possibly in exchange for military sales.
“His tweets are probably slowly losing the kind of impact that they used to have.”
This report by The Canadian Press was first published Sept. 24, 2019.
Companies in this story: (TSX:BB, TSX:CPG, TSX:ECA, TSX:CRON, TSX:ACB, TSX:GSPTSE, TSX:CADUSD