Equities
Canada’s main stock index was muted in early trading. On Wall Street, key indexes were narrowly mixed as traders weigh a better-than-expected reading on hiring in the U.S. economy.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 22.95 points, or 0.11%, at 20,848.4. Heading into Friday’s session, the index was modestly lower for the week.
In the U.S., the S&P 500 opened higher by 3.32 points, or 0.07 per cent, at 4,692.72, while the Nasdaq Composite opened higher by 6.84 points, or 0.05 per cent, to 14,517.23 at the opening bell.
The Dow Jones Industrial Average fell 4.92 points, or 0.01 per cent, at the open to 37,435.28. All three U.S. indexes were down for the week ahead of Friday’s open.
Ahead of the opening bell, December employment figures were released in both Canada and the U.S.
Statistics Canada said hiring in Canada in stalled in December. For the month, the economy created a slim 100 jobs for the month. Economists, who had been forecasting a continued slowdown, had been expecting a number closer between 15,000 and 20,000. The jobless rate was unchanged at 5.8 per cent.
Average hourly wage growth, meanwhile, rose 5.7 per cent in December, compared with 5 per cent in November. The December figure was the highest growth rate since early 2021, Statscan said.
“Overall, this is a classic mixed bag report with some stronger than expected news (hours worked, wages) and some weaker (employment, participation), and because of that we continue to forecast a first interest rate cut from the Bank of Canada in June this year,” CIBC senior economist Andrew Grantham said.
In the U.S., the picture was brighter. The U.S. economy generated 216,000 positions, more than the 170,000 economists had been forecasting. The unemployment rate was unchanged at 3.7 per cent.
“Two consecutive positive jobs reports and solid consumer spending amid easing inflation are welcome news both for consumers and investors,” Stephen J. Rich, chair and CEO of Mutual of America Capital Management, said.
“With the Federal Reserve recently signaling three cuts to the benchmark interest rate in 2024 and real GDP continuing to trend upward, a soft landing for the economy appears much more likely. Amid this optimism, we will continue to closely watch factors that could change this narrative.”
On the corporate side, The Globe’s Niall McGee and David Milstead report that Endeavour Mining Corp. has fired its chief executive, Sébastien de Montessus, alleging he engaged in “serious misconduct” around an “irregular payment” concerning an M&A transaction. The company said in a statement on Thursday that the payment Mr. de Montessus allegedly misdirected was US$5.9-million and related to the sale of an asset. Mr. de Montessus wrote in a statement to The Globe and Mail that in 2021 he instructed a creditor to pay for essential security equipment for employees in a conflict zone as an offset for an amount owed to Endeavour.
Overseas, the pan-European STOXX 600 was down 1.06 per cent in after the release of the U.S. jobs numbers. New figures released Friday morning showed the annual rate of euro zone inflation rose to 2.9 per cent in December from 2.4 per cent the month before. Britain’s FTSE 100 slid 0.98 per cent. Germany’s DAX and France’s CAC 40 were down 0.99 per cent and 1.27 per cent, respectively.
In Asia, Japan’s Nikkei rose 0.27 per cent. Hong Kong’s Hang Seng lost 0.66 per cent.
Commodities
Crude prices were higher in early trading and on track for a gain in the first trading week of the new year.
The day range on Brent was US$77.66 to US$78.50 in the early premarket period. The range on West Texas Intermediate was US$72.21 to US$73.21. Both benchmarks were up for the week, despite a choppy session on Thursday.
Prices continue to draw support from concerns over trade on the Red Sea in the wake of attacks by Iran-backed Yemeni Houthi militants in the region. Danish shipping giant Maersk said early Friday that all vessels due to transit the Red Sea and Gulf of Aden will instead be diverted south around Africa’s Cape of Good Hope for the foreseeable future.
Crude saw some downward pressure this week from the latest U.S. weekly inventory figures from the U.S. Energy Information Administration. The report showed U.S. gasoline and distillate inventories saw big builds last week as demand slipped, while crude stocks fell more than expected.
U.S. gasoline stocks rose by 10.9 million barrels, the largest build since May 1993. Analysts polled by Reuters had been expecting a decline of 215,000 barrels.
“The report, released late in the busy morning session in the U.S., was overwhelmingly bearish for refined products, indicating outsized builds across all three product categories due to exceptional demand weakness,” Stephen Innes, managing partner with SPI Asset Management, said.
“This development raises concerns about a potential disconnect between the market’s Goldilocks narrative and actual gasoline demand, especially when considering gasoline demand as a forward indicator of economic activity.”
In other commodities, spot gold was little changed at US$2,042.89 per ounce by early Friday morning. Gold has fallen nearly 1 per cent so far this week. U.S. gold futures were flat at US$2,049.80.
Currencies
The Canadian dollar was lower while its U.S. counterpart touched its best level in three weeks against a basket of world currencies.
The day range on the loonie was 74.73 US cents to 74.93 US cents in the predawn period. The Canadian dollar has lost about 1 per cent against the greenback over the last five days.
The U.S. dollar index rose 0.33 per cent to 102.76 and was up 1.4 per cent over the last five days. The greenback was on track for its best weekly performance since May.
The euro, meanwhile was down 0.38 per cent at US$1.0905 early Friday morning. Britain’s pound slid 0.25 per cent to US$1.2651.
In bonds, the yield on the U.S. 10-year note was higher at 4.036 per cent.
More company news
Telecom tower operator American Tower said on Thursday it would sell its India operations to Canada’s Brookfield Asset Management for US$2.5-billion. The transaction will be carried out by Brookfield’s Indian associate, Data Infrastructure Trust, and is expected to close in the second half of 2024. The deal values ATC’s Indian operations at an enterprise value of around $2-billion and includes ticking fees worth US$500-million. -Reuters
The Globe’s Alexandra Posadzki reports thousands of Rogers Communications Inc. customers in Ontario briefly reported issues with their internet and television service on Thursday evening, according to outage tracking website Downdetector.ca. Downdetector, which gathers data from multiple sources including social media and information submitted by users directly to its platform, showed more than 48,000 outage reports at 7:37 p.m. ET. A Rogers spokesperson said the intermittent service interruption, which was caused by a technical issue, has been resolved.
Economic news
Canadian and U.S. December employment reports (8:30 a.m. ET)
U.S. ISM services for December (10 a.m. ET)
With Reuters and The Canadian Press
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