Look Out Below Canada!

Commodities are getting trounced thanks to weaker than expected Chinese growth. It’s going to be a tough start to the week for Canadian investors.

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Canadian investors are set to face a painful day as China announced that GDP rose at a clip of just 7.7% in the first quarter.  According to Bloomberg, expectations were set for 8% growth.  This news has most global markets trading lower but can be expected to be especially harsh on Canada’s resource heavy index.

No commodity appears left unscathed by the Chinese data.  Currently, gold is off by 6.1%, silver is down 10%, and industrial metals like copper have declined by 3%.  WTI Crude Oil is also down by about 3%, trading at a price of $88.88.

Expect Barrick Gold (TSX:ABX,NYSE:ABX), Goldcorp (TSX:G,NYSE:GG), Teck Resources (TSX:TCK.B,NYSE:TCK), Suncor Energy (TSX:SU,NYSE:SU), and Canadian Natural Resources (TSX:CNQ,NYSE:CNQ) to be the names that drive our market lower on this otherwise fine spring’ish Monday.

The S&P/TSX Composite Index is loaded with resource and financial stocks.  Because of this, investors that rely on Canadian Index funds or ETFs severely lack diversification in their portfolio, opening them to undue risks.  We have created a special report that outlines an easy to implement strategy and 5 Canadian stocks that reduce the risks involved with passively investing in the Canadian market.  Click here now to receive “Buy These 5 Companies Instead of Following a Flawed Piece of Advice” – FREE!

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Fool contributor Iain Butler is short $32 July 2013 put options on Goldcorp, short $26 August put options on Teck and owns shares outright in Barrick Gold and Teck.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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