Canada’s main stock index closed down Friday while U.S. markets were mixed after a bumpy day of trading following job reports that came in stronger than expected.
Markets in both countries dropped early as the reports showed continued high demand for labour, with the unemployment rate in Canada dipping slightly to 5.1 per cent and holding steady in the U.S.
Canada’s job gains of 10,000 for November was positive, though well off the surprise gains of 108,000 a month earlier, while in the U.S. gains of 263,000 beat economists’ forecasts for 200,000.
The jobs numbers pushed markets notably lower in early trading over fears the data would mean a sharper central bank rate hike path ahead, said Anish Chopra, managing director at Portfolio Management Corp.
“Job growth, job creation was higher than expected,” said Chopra. “Certainly there were investor concerns earlier in the morning, with the volatility earlier in the morning.”
Losses eased though as investors digested the news and likely factored in a wider view of the economy, including a slowdown in housing and other areas, he said, despite some jumps on the job side.
“The economies in Canada and the U.S. appear to be slowing, so you’re having the intended impact that the central banks want on slowing the economy. There’s always going to be pockets, certainly if you look at job creation.”
The S&P/TSX composite index ended down 39.79 points at 20,485.66 after trading more than a hundred points lower early in the day and pushing briefly into positive territory in mid-afternoon.
In New York, the Dow Jones industrial average closed up 34.87 points at 34,429.88. The S&P 500 index was down 4.87 points at 4,071.70, while the Nasdaq composite was down 20.95 points at 11,461.50.
The mixed day also included a mix of losses and gains across sectors of the Toronto Stock Exchange, with telecom, utlities, information technology and financials all down, while energy, industrials, base metals and especially health care were up.
Cannabis companies helped prop up the health care index, including Canopy Growth Corp. up 9.1 per cent and Tilray Brands Inc. up 9.6 per cent after U.S. President Joe Biden signed a cannabis medical research bill into law.
The energy index managed a slight gain despite the January crude oil contract closing down US$1.24 at US$79.98 per barrel and the January natural gas contract down 46 cents at US$6.28 per mmBTU.
Oil retreated in part following a European Union deal to cap the price of Russian oil, but it hasn’t seen big losses lately despite volatility, said Chopra.
“Energy’s pretty volatile, and it’s been under some pressure lately over the last month … but it’s generally hung in there.”
The stronger U.S. jobs data also pushed up the U.S. dollar, leading the Canadian dollar to trade for 74.25 cents US compared with 74.44 cents US on Thursday.
The February gold contract was down US$5.60 at US$1,809.60 an ounce and the March copper contract was up three cents at US$3.85 a pound.