S&P/TSX composite falls slightly, U.S. markets slip more than 1 per cent

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Realistic 2023 financial goals – Jan 5, 2023

Canada’s main stock index closed with slight losses Thursday, buoyed by strength in energy and metals, while U.S. markets lost more than one per cent amid continued strength in the job market.

The S&P/TSX composite index was down 81.99 points at 19,506.84.

In New York, the Dow Jones industrial average was down 339.69 points, or 1.02 per cent, at 32,930.08. The S&P 500 index was down 44.87 points, or 1.16 per cent, at 3,808.10, while the Nasdaq composite was down 153.52 points, or 1.47 per cent, at 10,305.24.

New data released Thursday showed the U.S. job market remains stubbornly hot with payroll company ADP reporting a bigger-than-expected increase in jobs at private companies last month, raising worries about future interest rate hikes from the Federal Reserve in its continued attempts to rein in inflation.

Read more: Southern Alberta businesses dealing with inflation, possible recession entering 2023

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“Jobs remain plentiful in the U.S.,” said Ashish Utarid, assistant vice-president of investment strategy at IG Wealth Management.

Though there have been some high-profile layoffs in the tech industry, there are still plenty of jobs out there, he said.

The strong jobs data had interest rate sensitive sectors like tech trending further down on Thursday, said Utarid.

“The NASDAQ continues to slide because valuations are taking front stage,” he said.

The TSX had a better day in part because oil prices were up after significant declines earlier in the week, said Utarid. The energy index was up 0.88 per cent, while financials were down 0.82 per cent, utilities 1.19 per cent and information technology 1.83 per cent.

However, Friday will see Canadian jobs data released that could have a similar chill on markets depending on how closely the data mirrors the U.S., said Utarid.

The Bank of Canada’s next rate decision is in less than three weeks, and Utarid said if the labour market doesn’t show the signs of cooling that the central bank is looking for, Canadians could be in for another rate hike of 25 to 50 basis points.

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The Canadian dollar traded for 73.72 cents US compared with 74.03 cents US on Wednesday.

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The February crude oil contract was up 83 cents at US$73.67 per barrel and the February natural gas contract was down 45 cents at US$3.72 per mmBTU.

The February gold contract was down US$18.00 at US$1,834.80 an ounce and the March copper contract was up eight cents at US$3.82 a pound.

— With files from The Associated Press

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