The temperature’s dropping, there’s less daylight, and the kids are back to school, yet, the Canadian market is acting like it’s still the dog days of summer.
While the S&P 500 is having a September to remember, clocking a +4% gain thus far, today’s negligible gain for the S&P/TSX Composite (^GSPTSE) has our market once again lagging its U.S. peer after a strong summer run.
Helping to eke out today’s 10 basis point gain for the Canadian market were two of the big banks. Royal Bank (TSX:RY) and its 0.62% gain was the biggest positive contributor, and TD Bank (TSX:TD) with its 0.70% gain was second. Neither move was based on anything that resembled material news.
Holding our market back on this fine September Tuesday (in this part of Ontario at least) was Potash (TSX:POT) and Suncor Energy (TSX:SU). Potash fell by 1.8% after its U.S. peer Mosaic lowered its sales, volume, and margin guidance for its potash and phosphates segments in the third quarter. Cautious dealers and deferred purchases were cited as reasons for this lowered guidance. Mosaic also lowered its price expectation for potash on the top end to $330 to $340 per tonne.
Suncor’s -0.72% day was also related to market oriented moves as the price of WTI Oil fell by just over 1% to close at US$105.49/barrel. The support that oil received from the ongoing Syrian situation has begun to wane as U.S. actions appear increasingly unlikely.
Foolish Takeaway
Once again, resource and financial companies had a significant impact on our market’s performance. Because of their heavy-weightings in the TSX, these stocks can be harmful for those investors that think they are well-diversified with an index fund or ETF linked to the S&P/TSX Composite Index.
We have prepared a Special FREE Report that will clue you into the perils of passively investing in the Canadian index and suggests an easy to implement alternative strategy. The report is called “5 Stocks That Should Replace Your Canadian Index Fund”. One of these 5 is in the process of being taken over at a huge premium. You can find out who the remaining 4 are simply by clicking here.
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Fool contributor Iain Butler owns shares of Potash. The Motley Fool doesn’t own shares in any of the companies mentioned.
