For those who like to see calm financial markets, this first week of this new trading year presented a most unwelcome picture. From stocks to oil to the loonie, the overarching theme seemed to be "sell."
The benchmark index of the Toronto Stock Exchange hit its lowest level in two and a half years and entered official bear market territory on Thursday — signifying a drop of 20 per cent from its September 2014 top.
The S&P/TSX composite index slipped just three points on Friday, but that was enough to extended Toronto's unbroken streak of losses to eight consecutive trading days. Since the new year began, the TSX has dropped almost 560 points, closing at 12,445 on Friday.
- How stock market 'circuit breakers' cool trading panic
- TSX closes in bear market territory amid plunging oil, stock prices
The final leg of this trip to less-than-bountiful unfolded in the first four days of the week — especially Monday and Thursday — when investors decided to step back from risk in a big way.
Panic selling in China
On each of those two days, China halted stock trading twice when panic selling triggered circuit breakers. Chinese investors fear that their economy is slowing down. And since that is the world's second biggest economy — and one that consumes plenty of raw materials — it didn't take long for that fear to spread.
In New York, the Dow Jones industrial average and the broader S&P 500 index both had their worst-ever five-day start to a year.
On Friday, the Dow shed another 168 points to close at 16,347 — bringing the Dow's loss for the week to more than 1,000 points.
Global growth concerns helped to drive oil down to new multi-year lows this week. It settled at $33.16 US a barrel on Friday, down a whopping 10 per cent on the week. A Wednesday inventory report that showed U.S. crude supplies at an all-time high also weighed on oil prices.
Dollar at 2003 lows
The Canadian dollar spent the week repeatedly testing new 12½-year lows, courtesy of low oil.
"It is not a coincidence that the Canadian dollar is about where it was back in 2003 and 2004 — oil prices are also about where they were back then," said Bank of Canada governor Stephen Poloz on Thursday.
The Canadian dollar is also being pressured by the likelihood that the U.S. will continue to raise interest rates while Canada sits on its hands or perhaps even cuts rates further.
The loonie ended Friday trading at 70.68 cents US, down a quarter of a cent on the day and down more than a cent and a half this week.
It's the lowest close for the dollar against its U.S. counterpart since July 2003.