Equity Markets
Canada's main stock index fell in early trading on Friday as bank and resource stocks pulled the market lower.
The Toronto Stock Exchange's S&P/TSX composite index fell 43.23 points, or 0.27 per cent, to 15,971.76 shortly after the open.
All but three of the index's 10 main groups retreated.
The Canadian dollar strengthened to a nine-day high against its U.S. counterpart on Friday after stronger-than-expected domestic jobs data supported the case for further interest rate increases from the Bank of Canada next year.
Canada's economy added 35,300 jobs in October on gains in full-time employment, while wages posted their biggest gain in 18 months. Analysts had expected the economy to add 15,000 job.
"The jobs data looks pretty good, with full-time employment way up again," said Andrew Kelvin, senior rates strategist at TD Securities.
"What we have seen in the labor data does support tighter (monetary) policy at some point next year and perhaps sooner than later."
Perceived chances of another rate hike by March rose to 88 per cent from 77 per cent before the data, the overnight index swaps market indicated.
The central bank hiked rates in July and September for the first time in seven years, but has turned more dovish since September.
At 9:23 a.m. ET, the Canadian dollar was trading at $1.2735 to the greenback, or 78.52 U.S. cents, up 0.6 per cent.
The currency's weakest level of the session was $1.2835, while it touched its strongest since Oct. 25 at $1.2716.
Wall Street opened higher on Friday after robust October jobs data report added to upbeat investor sentiment following Apple's blowout results and strong initial demand for the company's new iPhone X.
The Dow Jones Industrial Average rose 30.25 points, or 0.13 per cent, to 23,546.51. The S&P 500 gained 1.56 points, or 0.06 per cent, to 2,581.41. The Nasdaq Composite added 19.85 points, or 0.3 per cent, to 6,734.80.
The Labor Department's closely watched employment report showed U.S. job growth rebounded in October after hurricane-related disruptions hurt employment in September.
Nonfarm payrolls rose by 261,000 jobs last month, according to the report. That was the largest gain since July 2016, but was below economists' expectations for an increase of 310,000 jobs.
The unemployment rate fell to 4.1 per cent from 4.2 per cent and average hourly earnings were largely unchanged. However, the data hinted at slowing labor market momentum as annual wage gains sharply retreated.
However, the data did little to move the case for an interest rate increase by the Federal Reserve in December.
"The headline is all noise, you are starting to adjust for the hurricanes and it's really hard to know exactly what's going to happen," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.
"I thought the number overall was good."
Apple surged 2.8 per cent to $172.80 in early trading after reporting upbeat results and strong initial demand for the new iPhone X. At current levels, Apple was on pace to become the first company to breach $900-billion in market capitalization.
With more than three-fourths of the S&P 500 companies having reported, 72.7 per cent have topped profit estimates, led by technology companies.
President Donald Trump on Thursday tapped Fed Governor Jerome Powell to become head of the U.S. central bank, in a largely anticipated move, signaling a continuation of current chair Janet Yellen's monetary policies.
In Washington, House Republicans also disclosed their long-delayed plans for tax cuts on Thursday.
World shares took a breather and the dollar crept up on Friday on the back of the Fed news.
Earlier in Asia, a holiday in Japan kept volumes. Australia's main index firmed 0.4 per cent and China's blue chips dropped half a percent. MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1 per cent to be just under its highest since late 2007.
MSCI's world equity index, which tracks shares in 47 countries, was on course for its first dip in seven sessions - barely noticeable after the latest wave of record highs.
European shares inched up in early deals tech stocks gained after Apple's stock hit new heights. Carmakers offset drops elsewhere from the likes of French bank Societe Generale.
Britain's FTSE was down 0.15 per cent, Germany's DAX gained 0.05 per cent and France's CAC slid 0.14 per cent.
Commodities
Oil prices rose on Friday, nearing their highest levels in more than two years, with buyers attracted by expectations of an extension to a global pact to cut output that has reduced oversupply.
Global benchmark Brent futures traded up 45 cents at $61.07 a barrel at 0914 GMT, approaching levels around $61.70 a barrel last seen in July 2015. Brent has risen around 38 percent since its low in 2017 reached in June.
U.S. West Texas Intermediate (WTI) crude traded at $54.92 a barrel, up 38 cents. WTI is around 31 percent above its 2017 low hit June.
This week's U.S. Energy Information Agency (EIA) report on crude inventories and exports showed a large draw in U.S. stocks, showing that market is rebalancing.
"Wednesday's EIA report was bullish so the longs took profit then but now the uptrend is reasserting itself. Roll-over of the OPEC/non-OPEC deal looks certain and is also supportive," said Tamas Varga, senior analyst at London brokerage PVM Oil Associates.
The Organization of the Petroleum Exporting Countries meets at the end of November to discuss further action after it agreed nearly a year ago with Russia and other producers to hold back 1.8 million barrels per day (bpd) of oil supply.
Gold prices traded in a narrow range on Friday, below the previous session's high, as the dollar steadied amid caution ahead of U.S. jobs data later in the day.
Spot gold was mostly unchanged at $1,275.82 per ounce, and was on track for its first weekly gain in three. It hit its highest in about two weeks at $1,284.10 in the previous session.
U.S. gold for December delivery dipped 0.1 percent to $1,276.50.
"Gold seems to be broadly flat. The announcement of Jerome Powell as the new Fed Chair was broadly in line with expectations," said John Sharma, an economist with National Australia Bank.
"Markets are waiting for the U.S. payrolls data. A strong result here would not be supportive of gold."
London nickel prices renewed their advance on Friday, putting the metal on course for a gain of nearly 10 percent this week and 27 percent year-to-date on expectations of bullish demand from the electric vehicle (EV) battery sector.
Currencies and bonds
The Canadian dollar edged down slightly as oil prices paused and was just shy of the 78 cent (U.S.) mark.
The Canadian dollar strengthened against its U.S. counterpart on Thursday, adding to its more stable profile this week as investors looked toward Friday's employment data on both sides of the border.
The loonie has fallen more than 6 percent since posting a more than two-year high in September at C$1.2063. Analysts said it has found support around C$1.2900, near the 50 percent retracement of the currency's rapid appreciation from May to September.
"The move up was over-extended," said David Bradley, director of foreign exchange trading at Scotiabank, who does not expect the loonie to weaken much further going into Friday's job numbers for October.
The U.S. dollar drifted sideways on Friday after a week of losses, as markets waited for U.S. jobs data to shake the currency out of recent ranges, with some market analysts saying the currency may have peaked for now.
The index measuring the U.S. dollar against a basket of peer currencies was up 0.1 per cent, though it was down for the week for the first time in three weeks, most because of its loss against the euro.
The market showed little reaction to U.S. President Donald Trump's appointment on Thursday of Jerome Powell, a Fed governor, to lead the U.S. central bank. That broke with precedent by denying incumbent Janet Yellen a second term but signalled a continuation of her cautious monetary policies .
"I think the Powell news was not really a surprise for markets, who have been expecting this, but we think the dollar may have hit a short-term peak for now in the absence of any upside data surprises," said Lutz Karpowitz, an FX strategist at Commerzbank in Frankfurt.
Canada 10-year bonds edged lower at 1.96 per cent, while U.S. 10-year Treasuries slipped to 2.35 per cent.
Stocks set to see action
Apple stock will be in focus as its iPhone X starts selling around the globe with users lining up to be the first to get one. The company also reported a quarterly profit of $2.07 per share, better than the $1.87 consensus estimate. Revenue also beat forecasts and the company gave strong current-quarter guidance. Its shares jumped nearly 4 per cent in premarket trading.
The U.S. Department of Commerce has imposed final tariffs averaging 20.83 per cent against most Canadian shipments of softwood lumber into the United States, intensifying trade tensions between the two countries. This could have an impact on lumber stocks as they absorb the news.
Canadian Pacific Railway Ltd.'s train crews have voted down a one-year contract, dealing a setback to chief executive officer Keith Creel's stated attempt to improve poor relations with the freight hauler's biggest union.
Starbucks reported late Thursday fiscal fourth quarter revenue and same-store sales that missed expectations, although its adjusted earnings per share of 55 cents matched forecasts. Its shares fell 1 per cent in premarket trading.
Bloomin' Brands, the operator of Outback Steakhouse and other restaurant chains reported adjusted quarterly profit of 12 cents per share, missing estimates by 3 cents a share. Revenue beat forecasts but it cut its full-year forecasts. Its shares fell 7 per cent in premarket trading.
CBS Corp., owner of the most-watched U.S. TV network, on Thursday reported revenue that missed Wall Street estimates largely due to lower ad sales. The New York-based broadcaster, home to such popular shows as "The Big Bang Theory" and "Homeland," reported a profit of $1.11 per share, beating analysts' average estimate of $1.07. However, Wall Street seized on the company's revenue results of $3.17 billion, which missed the analysts' estimate of $3.26 billion, according to Thomson Reuters I/B/E/S. Its shares were down 1.1 per cent in premarket trading.
AIG fell 3.6 per cent in premarket trading after the insurer posted a bigger loss on huge catastrophe losses and said it set aside more money in reserves to meet losses related to prior-year accident claims.
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Economic News
Statistics Canada says the economy added 35,300 jobs in October but the unemployment rate crept higher, with more young people looking for work. The agency says the number of full-time positions swelled by 88,700, offset by a drop in 53,400 part-time positions. Despite adding jobs, Canada's unemployment rate increased to 6.3 per cent, up from 6.2 per cent in September. The consensus was for the addition of 15,000 jobs, or 0.1 per cent, from September with the unemployment rate remaining 6.2 per cent.
Statistics Canada also reported that the country's trade deficit totalled $3.2 billion in September, essentially unchanged from the previous month. Exports fell 0.3 per cent to $43.6 billion in the month, a fourth consecutive monthly decline. A drop in exports of motor vehicles and parts were offset in part by higher exports of energy products. Prices of exports fell 0.6 per cent, while volumes grew 0.3 per cent. Imports fell 0.3 per cent to $46.7 billion as prices fell 1.5 per cent, but volumes increased 1.3 per cent. Consensus was for a trade deficit of $2.9-billion, declining from $3.4-billion in the previous month.
U.S. job growth accelerated in October after hurricane-related disruptions hurt employment in September, but there were signs that labor market momentum was slowing as annual wage gains sharply retreated. Nonfarm payrolls increased by 261,000 jobs last month as 106,000 leisure and hospitality workers returned to work, the Labor Department said in its closely watched employment report on Friday. That was the largest gain since July 2016, but was below economists' expectations for an increase of 310,000 jobs. The unemployment rate fell to near a 17-year low of 4.1 percent because people left the labour force. Wage growth disappointed, with earnings actually off by 1 cent an hour and showing just a 2.4 per cent annualized gain. Consensus was for an increase of 0.2 per cent from the previous month and a 2.7-per-cent rise year over year.
The U.S. trade deficit rose in September to $43.5 billion as imports grew faster than exports. The Commerce Department said Friday that the September trade gap in goods and services was up from $42.8 billion in August. Exports rose 1.1 per cent to $196.8 billion, the highest level since December 2014. But imports rose more: up 1.2 per cent to $240.3 billion.
(8:30 a.m. ET) Canada's average hourly wages for October are also revealed. Estimate is a rise of 2.5 per cent year over year.
(10 a.m. ET) U.S. factory orders for September are released. Consensus is an increase of 1.0 per cent from August.
(10 a.m. ET) U.S. non-manufacturing ISM for October is announced. Consensus is 58.5, down from 59.8 in September.
With files from Reuters and Bloomberg