Episode 137 of Down to Business podcast
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On Feb. 2, Facebook’s parent company suffered a plunge in its stock price that wiped out US$230 billion in value, and the latest sign that the tech sector has been taking a rout. Through the first three weeks of January, Shopify had lost US$79 billion.
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So what’s driving these companies down and what does it mean for the Canadian economy?
This week on Down to Business, Douglas Porter, chief economist and managing director at BMO Financial Group weighs in.
“We always have to sort out the equity market valuation in Canada, and the actual impact on the Canadian economy,” Porter said.
He said that many tech companies actually do not support that many jobs, either in the U.S. or in Canada, and so a plunge in stock price may have little impact on the wider economy. As for the rout, he pointed to the growing consensus that interest rates are set to march higher as central banks try to curb inflation.
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