TORONTO – Canada’s main stock index eked out a gain Friday as a rise in tech stocks helped outweigh losses in energy, while U.S. markets were mixed after employment reports on both sides of the border.
The S&P/TSX composite index closed up 11.76 points at 25,691.80.
In New York, the Dow Jones industrial average was down 123.19 points at 44,642.52.
The S&P 500 index was up 15.16 points at 6,090.27, reaching another all-time high, while the Nasdaq composite was up 159.05 points at 19,859.77, another record.
Both Canada and the U.S. got fresh jobs data on Friday, but the two reports painted very different pictures, said Pierre-Benoît Gauthier, vice-president of investment strategy at IG Wealth Management.
U.S. employers hired more than expected last month but the unemployment rate also ticked higher to 4.2 per cent.
“This report was just good enough,” said Gauthier — not too weak, but also not too strong.
The report sealed expectations that the U.S. Federal Reserve will announce a quarter-percentage-point interest rate cut later in December, said Gauthier. It shows the economy continues to handle higher rates well, he added.
In Canada, the economy added 51,000 jobs in November, while the unemployment rate jumped to 6.8 per cent.
The jobs number was undermined by the fact the gain was mainly public-sector hiring, said Gauthier.
“The federal government creating jobs is in no way, shape or form an indication of the strength of the Canadian economy,” he said.
The Bank of Canada is set to cut next week, and Gauthier thinks it could be an outsized half-percentage-point cut.
“The rate cuts here cannot come fast enough,” he said.
But the Bank of Canada will need to keep an eye on the increasing differential between rates in the U.S. and Canada, he added, which could put further downward pressure on the already weak Canadian dollar.
“The Bank of Canada will be stuck between a rock and a hard place, because at some point they’ll still have to defend the Canadian dollar,” he said.
A lower Canadian dollar could also result in some inflation as imports from the U.S. cost more.
The Canadian dollar traded for 70.74 cents US compared with 71.24 cents US on Thursday.
The January crude oil contract was down US$1.10 at US$67.20 per barrel and the January natural gas contract was essentially unchanged at US$3.08 per mmBTU.
The February gold contract was up US$11.20 at US$2,659.60 an ounce and the March copper contract was up a penny at US$4.20 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Dec. 6, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
