Markets sell off on Powell comments
Following Dr. Fauci’s warnings about reopening too soon the day before, markets on Wednesday sold off further after U.S. Chair Jerome Powell delivered sober warnings about the risk of a “prolonged recession and weak recovery.” Powell vowed he would do everything in his power to avoid pain. He ruled out that he would employ negative interest rates. Though no one was shocked by Powell’s comments, markets slide, with the Dow -2.17% and the Nasdaq -1.55%. The tech-heavy index dipped into the negative for 2020.
Before yesterday’s sell-off, Wall Street had rebounded roughly half of the 35% it shed during this pandemic. All 11 sectors of the S&P closed negative. For instance, Raytheon slid 4.62%. One of the few winners was PayPal which announced it was raising $4 billion in the corporate bond market and had BBB+ bond rating affirmed as “stable.” PayPal rose 1.91%.
In Toronto, the TSX fell 2.54% WCS plunged 8% per barrel to $21 after Norway blacklisted CNQ, Suncor and two more Canadian oil companies from its US$1 trillion sovereign wealth fund. Today’s pullback gave up some of massive gains to oil in recent weeks. Earnings continued to roll in with Linamar reporting a 572% spike in Q1 YOY liquidity despite Covid’s impact. Nonetheless, the car parts maker shed 2.18%. In contrast, Savaria, which makes in-home lifts for seniors, reported a sunny quarter and saw its shares spike 4.75%.