TORONTO – Canada’s main stock index moved lower Friday and U.S. stock markets fell after the latest job reports on both sides of the border.
The S&P/TSX composite index closed down 91.58 points at 25,442.91.
In New York, the Dow Jones industrial average was down 444.23 points at 44,303.40. The S&P 500 index was down 57.58 points at 6,025.99, while the Nasdaq composite was down 268.59 points at 19,523.40.
When it comes to U.S. economic data, “we are in an environment now where good news is bad news,” said Philip Petursson, chief investment strategist at IG Wealth Management.
The U.S. labour market added 143,000 jobs in January while the jobless rate fell to four per cent.
The report was a bit softer than expected but still good, said Petursson, with unemployment down and strong average hourly earnings.
In addition, “the revisions to the jobs data for the full year was not as deep as what people had thought,” he said, potentially sparking concerns about wage inflation.
That would not bode well for market watchers hoping for further interest rate cuts from the U.S. Federal Reserve.
“While it’s on the one hand good news for the economy, good news for households … It’s going to weigh on bond yields, pushing bond yields up, which will weigh on equity valuations, pushing them down,” said Petursson.
Amazon also dragged on the market after its revenue forecast fell short of expectations, and wasn’t the only major tech name to disappoint investors this earnings season, said Petursson.
“What Amazon’s earnings highlight is the valuations that the market has put on these stocks. And if they disappoint, even by a little, they suffer for it,” he said.
Amazon’s share price fell 4.1 per cent Friday.
“We’re in a really good economic environment. We’re in a really good earnings environment,” said Petursson. “But valuations probably have gotten too far ahead of themselves.”
The latest jobs data was also released in Canada, where the unemployment rate ticked lower to 6.6 per cent and the economy beat expectations by adding 76,000 jobs.
While not as strong as the U.S. labour market, the Canadian labour market is relatively healthy right now when compared with the last couple of decades, said Petursson.
“The Canadian economy has been kind of sputtering along, and yet we’ve been getting this very robust jobs data. Something doesn’t seem right here,” he said.
The Canadian dollar traded for 69.94 cents US compared with 69.82 cents US on Thursday.
The March crude oil contract was up 39 cents at US$71 per barrel and the March natural gas contract was down 10 cents at US$3.31 per mmBTU.
The April gold contract was up US$10.90 at US$2,887.60 an ounce and the March copper contract was up 13 cents at US$4.59 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Feb.7, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Note to readers:This is a corrected story. A previous version had the incorrect price for a barrel of oil.
