Monday, September 13 was a busy day for the markets. With tech stocks slipping, Chinese stocks tanking, and the TSX posting modestly decent gains, there was a lot to keep on top of. In this article, I will review the biggest stories out of the markets — both Canadian and international — from Monday.
Tech stocks tank
Monday was a rough day for tech stocks — both Canadian and global. As of this writing, the NASDAQ was down 0.13%, and Shopify (TSX:SHOP)(NYSE:SHOP) stock was down 1.6%. While tech stocks have been posting huge earnings beats lately, investors are not convinced that it will last in the post-COVID era. Interest rates are rising, retailers are open for business, and deceleration is giving investors the shakes.
So, while tech stocks are posting good earnings, their future may not be as good as their recent past. If you look at Shopify, for example, its most recent quarter was a beat, but it was already showing deceleration. Revenue grew at 56%, which was just a little more than half the previous quarter’s growth rate of 110%. Deceleration is no longer some hypothetical future possibility; it’s already happening. Of course, 56% is solid growth, but it’s a marked slowdown from 2020, when Shopify was cranking out 90% earnings growth quarter after quarter.
Chinese stocks get hammered
Another major development in the market today was a selloff in Chinese stocks. Just before market opened, the Chinese government announced that Alibaba and Tencent would have to start openly sharing content between each other. It also announced the restructuring of Ant Group, which is partially owned by Alibaba. These actions predictably weakened investor sentiment, and investors replied by selling off Chinese stocks.
TSX posts modest gains
Despite the selloff in its single biggest stock (Shopify), the TSX did moderately well on Monday.
By 2:00 PM, Canada’s biggest index was up 0.20%. That’s not a huge gain, but it’s much better than the NASDAQ or China’s Hong Kong index.
It looks like energy stocks were the main driver of the gains the TSX posted today. Bank stocks were down slightly, but energy stocks like Suncor Energy (TSX:SU)(NYSE:SU) positively rallied. Up 4.5% for the day, it was one of SU’s best days in months. The price of oil rose Monday, with WTI crude topping $70. So, it’s not surprising that energy stocks would lead the TSX higher. With higher oil comes higher profits for energy stocks like Suncor, and it appears they rallied in anticipation of higher earnings.
Foolish takeaway
In the markets, every day is eventful. This Monday was no exception. With big action in tech stocks, energy stocks, and Chinese stocks, there was enough action to keep anyone paying attention. Whether you were up or down today, it was a very interesting day to behold. And ultimately, some interesting price action is the most you can expect from the stock market on a day-to-day basis.
