Equities
The U.S. economy added far more jobs than expected in September, quashing expectations for another jumbo rate cut from the Federal Reserve and soothing some concern about the outlook for growth.
“Overall, though, despite the much stronger than expected figures, this report is unlikely to materially alter the FOMC’s policy outlook,” Pepperstone market strategist Michael Brown said.
“For sentiment, the forceful ‘Fed put’ should see the path of least resistance continuing to lead higher for equities over the medium-run, though conviction in the short-term could well be somewhat lacking, owing to ongoing geopolitical risks in the Middle East,” he said.
Investor sentiment has been jittery this week, as flaring tensions in the Middle East raise the risk of serious disruptions to global crude supply, setting crude oil prices on course for their biggest weekly gain in two years.
The Dow Jones Industrial Average rose 258.48 points, or 0.62 per cent, to 42,270.70, the S&P 500 gained 40.75 points, or 0.71 per cent, to 5,740.47 and the Nasdaq Composite gained 198.25 points, or 1.11 per cent, to 18,116.72.
The Toronto Stock Exchange’s S&P/TSX composite index opened up 76.14 points, or 0.32 per cent, at 24,044.64
Commodities
Oil prices were on track for weekly gains of 9% as investors feared a wider Middle East conflict could disrupt crude flows after President Joe Biden said the United States was discussing an Israeli attack on Iranian oil facilities.
Brent crude futures were up 66 cents, or 0.85 per cent at US$78.28 a barrel, as of 1323 GMT. U.S. West Texas Intermediate crude futures were up 63 cents, or 0.85 per cent, at US$74.34 a barrel.
“I think we’re probably not far away from getting an Israeli response,” said Tony Sycamore, a market analyst at IG.
“If we woke up on Saturday or Sunday morning to find out that there had been a response, that wouldn’t surprise me at all. So very much cautious trading ahead of that. We know it’s coming, it’s just creating uncertainty because we don’t know what the timing is, and of course we don’t know what they’ve decided in terms of the targets.”
In other commodities, spot gold was down 0.2 per cent at US$2,650.38 per ounce by 10:37 a.m. EDT, after scaling a record high of US$2,685.42 last week. U.S. gold futures lost 0.3 per cent to US$2,670.3.
Currencies and bonds
The Canadian dollar weakened against its U.S. counterpart.
The day range on the loonie was 73.69 US cents to 73.84 US cents in the early premarket period. The Canadian dollar was up about 0.09 per cent against the greenback over the past month.
The U.S. dollar index, which weighs the greenback against a group of currencies, was up 0.47 per cent at 11;03 EDT to 102.47.
The euro was down 0.06 per cent to US$1.1026. The British pound was up 0.28 per cent to US$1.3162.
In bonds, the yield on the U.S. 10-year note was up at 3.958 per cent.
Other corporate news
The total value of new stock sales by Canadian companies from July through September fell 74 per cent to $1.8-billion from $6.8-billion year-over-year, according to Refinitiv data due to be released Friday. That is the lowest total for any quarter since 1998.
And, U.S. dock workers and port operators have reached a tentative deal that will immediately end a three-day strike that has shut down shipping on the U.S. East Coast and Gulf Coast, the International Longshoremen’s Association (ILA) union and the United States Maritime Alliance (USMX) said on Thursday.
Economic news
(8:30 a.m. ET) U.S. nonfarm payrolls for September. The Street is expecting a rise of 130,000 jobs from August with the unemployment rate remaining 4.2 per cent and average hourly earnings up 0.3 per cent (and 3.8 per cent year-over-year).
(10 a.m. ET) Canada’s Ivey PMI for September.
With Reuters and The Canadian Press