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Ahead of the long weekend, a round of profit taking, especially in the big tech issues like Apple Inc. (NSD: AAPL) took some of the steam out of markets last week. After reaching record highs, the big indexes entered the season of volatility with weekly losses, even as U.S. job gains topped 1.3 million for August.
The S&P 500 Composite Index retreated 2.3% on the week, but still gained 9.6% in August overall. Meanwhile, the technology-weighted Nasdaq Composite Index fell 3.3% on the week, but surged 26.1% in August, driven by momentum among the technology majors, like Apple, Amazon.com Inc. (NSD: AMZN), Netflix Inc. (NSD: NFLX), and Alphabet Inc. (NSD: GOOG).
The CBOE Volatility Index rose to 30.75 on Friday, up from 22.21 a month ago, suggesting increasing risk in the markets.
In Canada, the S&P/TSX Composite Index remained just a hair below breakeven on the week, while posting a 2.1% gain for August. Weakness in the U.S. dollar helped support the index, but fading job gains cast a shadow over markets as Statistics Canada reported an employment increase of 246,000 jobs in August, compared with 418,000 in July and 952,000 in June. The unemployment rate ticked down slightly to 10.2% in August from 10.9% in July.
The selloff in technology stocks weighed on the TSX, as Shopify Inc. (TSX: SHOP) lost 4.5% on the week, taking the S&P/TSX Capped Information Technology Index to a 4.2% loss on the week. And declining crude oil prices (down 8.0% on the week) put a damper on Canada’s influential energy sector, as the S&P/TSX Capped Energy Index slipped 2.5% on the week.
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