Crypto causes market loss
The Canadian Press - May 19, 2021 - Business Buzz

Photo: The Canadian Press

North American stock markets partially recovered from a morning dip fuelled by a big pullback in cryptocurrency followed by the Federal Reserve later indicating it could soon discuss tapering stimulus.

The day started with a so-called flash crash as crypto assets plunged by at least 30%, partially on news about China regulating how cryptocurrencies can be held in the country.

But then investors bought the dip, especially in tech stocks.

“I think it’s setting up to be a positive sentiment day as people will feel better because when you came in this morning and looked at the open it looked like it could have been a lot worse,” said Greg Taylor, chief investment officer of Purpose Investments.

He said the bounce back is a win “for the bulls in the market.”

“We’ve got people coming back to deploy assets, and it’s just a reminder that there’s so much cash in the system from the stimulus, that money is being spent and people are still apt to buy the dip on stocks when we get a down open,” he said.

The S&P/TSX composite index closed down 90.02 points from Tuesday’s record high to 19,417.03 after dropping as much as 282 points.

In New York, the Dow Jones industrial average was down 164.62 points at 33,896.04 after losing as much as 589 points. The S&P 500 index was down 12.15 points at 4,115.68, while the Nasdaq composite was down 3.90 points at 13,299.74.

The rally was tempered after minutes from the Federal Reserve’s recent meeting indicated that a strong boost in economic activity may prompt the central bank to soon discuss tapering its stimulus.

The Canadian dollar traded for 82.64 cents US compared with 82.98 cents US on Tuesday.


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