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Equities

Canada’s main stock index opened higher Friday with a better-than-expected reading on hiring in September underscoring hopes for the economic recovery. On Wall Street, major indexes were positive on optimism over stimulus talks in Washington, with both the Dow and S&P 500 headed to a second straight week of gains.

At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 59.4 points, or 0.36 per cent, at 16,593.94.

The Dow Jones Industrial Average rose 108.10 points, or 0.38 per cent, at the open to 28,533.61.

The S&P 500 opened higher by 12.84 points, or 0.37 per cent, at 3,459.67, while the Nasdaq Composite gained 66.62 points, or 0.58 per cent, to 11,487.60 at the opening bell.

Canadian markets will be closed on Monday for the Thanksgiving holiday.

Market movement this week has been closely tied to progress on talks in Washington for a new stimulus package. Early in the week, U.S. President Donald Trump delivered a shock by tweeting that he had called for a halt to talks on a broad package. He later also suggested he supported a more targetted approach to aid. However, reports now suggest that a wider approach is back on the table.

On Thursday, House Speaker Nancy Pelosi’s deputy chief of staff tweeted that Ms. Pelosi had spoken with Treasury Secretary for 40 minutes about a comprehensive bill with Mr. Mnuchin making clear the president’s interest in reaching an agreement.

“Only two days after U.S. President Trump announced he will halt stimulus talks with Democrats, there was a big U-turn,” Axi market analyst Milan Cutkovic said.

“While a deal between Republicans and Democrats ahead of the U.S. presidential election still seems unlikely, market participants are reacting positively to signals that both parties are feeling the pressure to take action as the economic recovery may soon run out of steam.”

In this country, Statscan says the economy generated 378,000 new jobs last month, more than twice the market expectation. Economists had been forecasting a gain of about 150,000 in September. The unemployment rate fell to 9 per cent from 10.2 per cent. The Globe’s Matt Lundy reports that roughly three-quarters of the three million jobs lost during the pandemic have now been recovered.

Despite the better-than-expected increase, economists remained cautious.

“The country is now faced with new virus cases clearly trending in the wrong direction, threatening to upend the labour market recovery,” CIBC senior economist Royce Mendes said.

“As a result of that exogenous development, not much can be extrapolated from the solid print for September to future labour market readings. Still, the starting level for employment now looks better than anticipated, causing the Canadian dollar to rally and bond yields to rise.”

Overseas, the pan-European STOXX 600 edged up 0.24 per cent in morning trading with retail stocks among the best performers. Britain’s FTSE 100 rose 0.60 per cent. France’s CAC 40 gained 0.26 per cent while Germany’s DAX slid 0.04 per cent.

In Asia, Japan’s Nikkei closed down 0.12 per cent. Hong Kong’s Hang Seng finished off 0.31 per cent. The Shanghai Composite Index jumped 1.68 per cent as traders returned to work after a public holiday.

Commodities

Crude prices wavered in early going but were still on track for their biggest weekly gains since June as the impact of a storm in the Gulf of Mexico and a strike in Norway underpinned prices.

The day range on Brent so far is US$42.92 US cents to US$43.52 US cents. The range on West Texas Intermediate is US$40.79 to US$41.47.

Both benchmarks now look to heading for weekly gains of more than 10 per cent, according to Reuters figures. It would be the first weekly increase in three weeks.

In the Gulf of Mexico, producers have shuttered more than 90 per cent of the region’s offshore oil output in preparation for the impact of Hurricane Delta.

Meanwhile, a Norwegian strike has hit production in that country. Labour and company officials were set to meet on Friday in an effort to resolve the dispute.

An escalation could almost triple the existing outage from the ongoing strike if no solution is reached by Oct. 14, taking the total capacity cut to around 934,000 barrels of oil equivalents per day.

“The Gulf of Mexico accounts for approximately 17 per cent of U.S. oil output, so that pushed up WTI and Brent crude,” CMC Markets analyst David Madden said.

“Also in the mix was the news that oil workers in Norway went on strike and there is a prospect of further industrial action.”

In other commodities, gold prices gained as renewed hope over stimulus talks weighed on the U.S. dollar.

Spot gold climbed 1.1 per cent to US$1,914.06 per ounce and was up 0.8 per cent for the week. U.S. gold futures were up 1.2 per cent at $1,917.80.

“With renewed hopes for another fiscal stimulus, we saw the dollar decline, inflation expectations pick up and risk returning to the table. All these factors are pushing gold higher,” Howie Lee, an economist at OCBC Bank, said.

Currencies

The Canadian dollar was trading just below 76 US cents in early going as risk sentiment improves and the U.S. dollar slid against global counterparts.

The day range on the Canadian dollar is 75.76 US cents to 75.98 US cents.

The loonie firmed after Statistics Canada said employment last month was better than expected with the economy creating 378,000 new jobs, pushing the jobless rate to 9 per cent.

On global markets, the U.S. dollar index, which weighs the greenback against a group of world currencies, slid 0.1 per cent to 93.47. The index is down about 0.4 per cent for the week. If that holds, it would mark the second straight weekly decline. Last week, the index fell 0.8 per cent. The dollar index had touched a two-month high of 94.75 US cents in late September, according to figures from Reuters.

The risk-sensitive Australian dollar rose 0.2 per cent to US$0.7186, putting put modestly higher for the week.

The euro was up 0.1 per cent at US$1.1776. Britain’s pound gained 0.2 per cent to US$1.2961 and has held firm this week as prospects for a Brexit deal appeared to improve.

More company news

Montreal-based MTY Food Group Inc. reported steady earnings in the third quarter despite lower revenues caused by the impact of COVID-19. The restaurant company says its net profit was $22.9-million or 93 cents per diluted share, compared with $22.9-million or 91 cents per share a year earlier. Revenues for the period ended Aug. 31 decreased 16 per cent to $135.4-million from $161.3-million in the same period last year. System-wide sales fell to $897.5-million from $1.08-billion in the third quarter of 2019.

The Wall Street Journal reported that Advanced Micro Devices Inc. is in advanced talks to buy Xilinx Inc. in a takeover that could be valued at $30 billion. The deal would mark further consolidation in the semiconductor sector. The report said a deal could be announced as early as next week.

Netflix Canada is increasing some of its prices. The streaming giant says the basic plan for subscribers remains unchanged at $9.99 a month, but the standard monthly plan is going up by one dollar to $14.99, and the premium by two dollars to $18.99. Netflix says it’s implementing the price increase so it “can invest more in films and shows as well as the quality of members' product experience.”

Economic news

8:30 a.m. ET) Canadian employment for September.

(10 a.m. ET) U.S. wholesale trade for August.

With Reuters and The Canadian Press

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