Regional Banks and Trade Tensions Weigh on US and Canadian Markets

Strategic Insights -

The US and Canadian stock markets took a downturn on Thursday, as regional banks and trade tensions with China continued to spook investors. Zions Bancorporation disclosed a $50 million loss in the third quarter, while other regional banks like Western Alliance saw their shares slump due to concerns about credit stress. The S&P/TSX Composite Index declined 0.6% after setting a fresh record high the previous day.

Key Takeaways:

  • Zions Bancorporation disclosed a $50 million loss in the third quarter due to commercial and industrial loans.
  • Regional banks like Western Alliance saw their shares slump due to concerns about credit stress.
  • Trade tensions with China continued to spook investors, with US President Donald Trump threatening 100% tariffs on China starting November 1.
  • The S&P 500 has gained 12% so far in 2023, but is valued at a high 23 times expected earnings.
  • Earnings from major US banks offered signs of economic resilience, with analysts expecting 9.2% aggregate earnings growth in the third quarter.
  • The Philadelphia Fed Business Index declined 12.8 points in October, while Treasury yields dropped amid trade concerns and credit market worries.

Statistics:

  • The S&P 500 declined 0.63% to end the session at 6,629.07 points.
  • The Nasdaq declined 0.47% to 22,562.54 points, while the Dow Jones Industrial Average declined 0.65% to 45,952.24 points.
  • Ten of the 11 S&P 500 sector indexes declined, with financials down 2.75% and energy down 1.12%.
  • The TSX was down 178.32 points, or 0.58%, to 30,458.80, with financials down 1.8%.
  • Gold prices hit fresh record highs, with US futures for December delivery settling 2.5% higher at $4,304.60.

Sources:

  • Reuters
  • Globe staff