Markets stay steady ahead of U.S. election; oil falls to one-month low

TORONTO – Major North American stock markets were barely swayed in any direction Monday, despite negative pressure from a drop in crude prices and positive signs that consumers have picked up their spending in the U.S.

At the Toronto Stock Exchange, the S&P/TSX composite index was up 1.98 points at 14,787.27, with gold and materials stocks leading with the biggest gains.

In New York, the Dow Jones industrial average faded 18.77 to 18,142.42, while the S&P 500 declined 0.26 of a point to 2,126.15. The Nasdaq composite shed 0.96 of a point to 5,189.14.

Craig Fehr, a Canadian markets strategist at Edward Jones, says it seems like investors are staying cautious ahead of the U.S. presidential election, which is nearly a week away.

Stock markets have been mostly pricing in a victory by Democratic nominee Hillary Clinton, but that conclusion has become slightly more questionable after the FBI announced on Friday that it has revived an investigation into her private email practices. She is vying to be president against Republican nominee Donald Trump.

“If we just use the polls as an indication, that latest set of news might be suggesting that there is a little bit of uncertainty in terms of the outcome,” said Fehr, who is based in St. Louis.

“This election was, in my opinion, never a foregone conclusion anyway. But again, until the end of last week, the polls were slightly suggesting a little larger margin of victory for Clinton, to that extent, it has narrowed a little bit on the latest round of news.”

Whatever the result, he noted that the markets won’t likely see any jaw-dropping volatility until after voters head to the polls on Nov. 8.

Fehr urged investors to stay the course, even if there is a “knee-jerk” reaction over the short-term due to the results because the fundamental factors that support market stability, including economic data and earnings results, have been positive so far.

The U.S. Commerce Department reported that shoppers boosted their spending in September at the fastest pace in three months, led by an increase on sales of cars and other durable goods.

It’s another sign of growth that the U.S. Federal Reserve will be considering once it meets for a two-day policy meeting starting Tuesday. The central bank is not expected to raise interest rates from its current low levels until after the election, most likely at its December meeting.

In currencies, the Canadian dollar fell 0.15 of a cent U.S. to 74.57 cents US, as the December crude contract dropped to its lowest level in more than a month, down $1.84 at US$46.86 per barrel.

In other commodities, the December gold contract lost $3.70 to US$1,273.10 an ounce, December natural gas dipped eight cents at US$3.03 per mmBTU, and December copper contracts were up one cent at US$2.20 per pound.

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Note to readers: This is a corrected version. An earlier version had an incorrect figure for the S&P/TSX close.