April 19, 2024
TSX suffers modest losses while jobs report and tech lift US markets to new highs

TORONTO – Canada’s main stock index fell marginally lower Friday on weakness in energy shares, while U.S. markets hit another record high on tech stocks and a hot jobs report.

Between Thursday and Friday, US markets largely erased Wednesday’s selloff.

Markets fell on Wednesday after the US Federal Reserve kept its key interest rate steady and made comments that suggested it was unlikely to start cutting rates as soon as many had expected.

The comments “basically threw a big bucket of cold water” on expectations that rate cuts would begin in March, said Philip Pettersson, chief investment strategist at IG Wealth Management.

But a bleak jobs report on Friday followed by promising US economic data on Thursday helped ease the situation, he said.

The S&P/TSX composite index closed down 34.12 points at 21,085.09.

In New York, the Dow Jones industrial average was up 134.58 points at 38,654.42. The S&P 500 index was up 52.42 points at 4,958.61, while the Nasdaq Composite was up 267.31 points at 15,628.95.

The latest jobs report showed US employers added twice as many jobs in January as economists had predicted, while December’s job gains were revised upward.

The jobs report showed the economy is performing better than people thought, Petterson said, and “it doesn’t matter whether the Fed cuts rates or not.” “The economy can withstand this at current levels.”

Meta Platform and Amazon’s strong earnings added fuel to the fire, with shares of the Facebook owner rising more than 20 percent and shares of the e-commerce giant rising nearly eight percent.

After digesting the Fed’s interest rate comments, investors were reminded that there is still plenty of good news, Pettersson said, adding that investors should shift from expectations of a rate cut to optimism over the continued strength of the US. Could. economy.

“As March comes to an end… I think investors are going to focus on economic data,” he said.

“Good news is rewarded again.”

Earnings from major tech companies were mixed, Peterson said, but they were coming in against “high expectations.”

Meanwhile in Canada, “everything that’s working in favor of the US is working against the TSX right now,” he said.

With tech stocks playing a much smaller role on the TSX and weakness in energy and telecommunications stocks weighing on the market, Canadian equities didn’t end the week in the green like their U.S. counterparts.

In fact, recent Canadian economic data from the Bank of Canada supports a cut, Patterson said, as the numbers north of the border are coming in much weaker.

“The Canadian economy, despite GDP coming in a little better than expected in November, I think is still quite weak,” he said.

“The Bank of Canada is in a very different position than the Fed. I think the Bank of Canada is in a position where they really need to cut interest rates.

The Canadian dollar traded at 74.33 cents US, compared with 74.60 cents US on Thursday.

The March crude contract was down US$1.54 at US$72.28 a barrel and the March natural gas contract was up three cents at US$2.08 a mmBtu.

The April gold contract was down US$17.40 at US$2,053.70 an ounce and the March copper contract was down three cents at US$3.82 a pound.

– With files from The Associated Press

This report by The Canadian Press was first published Feb. 2, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Rosa Saba, The Canadian Press

Source: ca.finance.yahoo.com

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