Canada’s main stock index tumbled over 1% on Friday after a stronger-than-expected U.S. payrolls data sparked fears of a highly cautious approach towards interest rate reduction by the Federal Reserve this year.
The TSX erased 325.78 points, or 1.3%, to try to regroup in the middle of the Friday session at 24,747.58, marking its worst day since December 18 and its first weekly loss in three weeks.
The Canadian dollar eked higher 0.16 cents at 69.27 cents U.S.
In corporate news, Brookfield was reportedly mulling a takeover bid for Insignia Financial. Brookfield shares sagged $4.07, or 4.8%, to $80.11.
Elsewhere, Tilray Brands tumbled 24 cents, or 12.1%, to $1.75. after posting a wider second-quarter loss.
Statistics Canada said the economy created 91,000 jobs (+0.4%) in December. The unemployment rate declined 0.1 percentage points to 6.7%.
Building permits in this country decreased by $739.5 million (-5.9%) to $11.7 billion in November.
ON BAYSTREET
The TSX Venture Exchange lost 5.89 points, or 1%, to 609.19.
All but three of the 12 TSX subgroups lost ground heading into noon hour with health-care sagging 4%, information technology ducking 2.1%, and financials failing 1.9%.
The three gainers proved to be energy, picking up 1%, gold edging ahead 0.2%. and consumer discretionary stocks, pointing higher 0.1%.
ON WALLSTREET
Stocks tumbled Friday after a hot jobs report dampened Wall Street’s expectations for more interest rate cuts from the Federal Reserve this year.
The Dow Jones Industrials crumbled 648.73 points, or 1.5%, by noon EST to 41,986.47.
The S&P 500 Index dropped 98.32 points, or 1.7%, to 5,820.01
The NASDAQ Composite plummeted 389.61 points, or 2%, to 19,089.08. The three major averages are on pace for a second straight weekly loss.
Growth stocks that could be hurt the most if a spike in rates causes investors to get more conservative led the losses. Nvidia shed more than 3%. Palantir was off by about 3.5%.
U.S. payrolls grew by 256,000 in December, while economists polled by Dow Jones expect to see an increase of 155,000. The unemployment rate, which was projected to remain at 4.2%, fell to 4.1% during the month. The yield on the 10-year Treasury note spiked to its highest level since late 2023 after the report.
Traders give 97% odds the Fed stands pat on rates at its meeting later this month and now believe the central bank will hold rates where they are at the March meeting as well, based on fed funds futures trading. Odds of a March cut fell to around 25% following the data, down from 41% odds a day earlier. The Fed cut its benchmark rate by a quarter point last month.
Stocks took a leg lower after The University of Michigan’s consumer sentiment index signaled concern on the inflation front. The overall index came in at 73.2 for January, missing a Dow Jones estimate of 74. Part of that was driven by one-year inflation expectations rising to 3.3% from 2.8%. Five-year expectations also scaled to their highest level since June 2008.
U.S. markets were closed Thursday in memory of former President Jimmy Carter.
Prices for the 10-year Treasury sank, hiking yields to 4.75% from Wednesday’s 4.68%. Treasury prices and yields move in opposite directions.
Oil prices regained $1.91 to $75.83 U.S. a barrel.
Prices for gold barreled ahead $30.70 an ounce to $2,721.50 U.S.
