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Equities
Canada’s main stock index hit a record high early Friday with strength in the energy sector, on the back of rising crude prices, offsetting disappointing economic data. On Wall Street, the S&P 500 and Nasdaq also both managed records, buoyed by optimism over government stimulus efforts.
At 9:32 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 58.65 points, or 0.33 per cent, at 18,100.62.
The Dow Jones Industrial Average rose 38.0 points, or 0.12 per cent, at the open to 31093.81. The S&P 500 rose 6.6 points, or 0.17 per cent, at the open to 3878.3, while the Nasdaq Composite rose 47.1 points, or 0.34 per cent, to 13824.878 at the opening bell.
“This week has been just what the doctor ordered after weeks of unease and growing anxiety in the markets,” OANDA senior analyst Craig Erlam said.
“Whether driven by the Reddit rebellion, a lack of trust in the Fed to not intervene too soon in the recovery or just a normal corrective move following a powerful run in uncertain times. Whatever the cause, investors will be going into the weekend somewhat relieved.”
Early Friday, the U.S. Senate narrowly approved a budget blueprint that would allow Democrats to push President Joe Biden’s US$1.9-trillion coronavirus virus relief bill through Congress without Republican support. At the end of about 15 hours of debate and back-to-back votes on dozens of amendments, the Senate found itself in a 50-50 partisan deadlock over passage of the budget plan. That deadlock was broken by Vice President Kamala Harris, whose “yes” vote provided the win for Democrats.
Employment data will also be key heading into the trading day.
In the U.S., the U.S. economy gained about 49,000 new positions, below market forecasts The unemployment rate held at 6.3 per cent.
In this country, Statistics Canada said the economy shed nearly 213,000 positions last month, with the jobless rate spiking to 9.4 per cent as lockdowns weighed in several regions.
“In the grand scheme of things, the second wave has still been less destructive in terms of total economic damage than the the first, CIBC senior economist Royce Mendes said.
“Last March and April the labour market shed 3 million jobs. After recovering 2.4 million jobs between May and November, employment has only declined a combined 265K in December and January.”
On the corporate side, shares of Snap were down in early trading after the owner of the Snapchat app warned that upcoming privacy changes by Apple Inc. could hurt Snap’s ad business. However, in results released after Thursday’s close, Snap still topped Wall Street forecast for user growth and revenue in the fourth quarter.
Overseas, major European markets were higher with the pan-European STOXX 600 rising 0.38 per cent with travel and leisure stocks advancing. Britain’s FTSE 100 rose 0.08 per cent. France’s CAC 40 was up 0.93 per cent and Germany’s DAX added 0.25 per cent.
In Asia, Japan’s Nikkei finished up 1.54 per cent. Hong Kong’s Hang Seng gained 0.60 per cent.
Commodities
Crude prices continued to trade near their best levels in a year, with Brent edging toward US$60 a barrel, supported by OPEC+ supply curbs and optimism over the economic recovery.
The day range on Brent is US$59.08 to US$59.75. The range on West Texas Intermediate is US$56.43 to US$57.09. On Thursday, Brent touched its best level since Feb. 20, 2020, while WTI managed its highest since late January last year.
“Oil continued to push higher overnight, although the rally’s pace being slowed by a rising U.S. dollar,” OANDA senior analyst Jeffrey Halley said in a note.
“With inflation sentiment rising in the U.S., partially due to higher government borrowing, adding a tailwind to the economic recovery, the conditions still remain supportive for oil markets,” he said.
Oil has been bolstered this week by a decision Wednesday by OPEC members and their allies to stick to current supply caps. Weekly figures showing a sharp decline in U.S. crude inventories has also helped support the gains.
“Brent above $59 a barrel is pricing in a level of optimism that worries me a bit - not because I am concerned about oil fundamentals - but because of how sentiment might react to the inevitable bumps in the road as the market moves back into balance,” Axi chief market strategist Stephen Innes noted.
In other commodities, gold rose on Friday, bouncing back from a more than two-month low hit in the previous session. However, prices still look headed for their biggest weekly drop in four as a result of strength in the U.S. dollar.
Spot gold rose 0.3 per cent to US$1,798.41 per ounce, after falling over 2 per cent to their lowest since Dec. 1 on Thursday. U.S. gold futures gained 0.4 per cent to US$1,799.10.
Silver looks headed for its worst week in three after pulling back from multi-year highs hit earlier this week.
Spot silver rose 0.7 per cent to US$26.47 an ounce, but was down 1.3 per cent for the week. Prices have dropped over 11 per cent since scaling a near eight-year peak of US$30.03 on Monday, according to figures from Reuters.
Currencies
The Canadian dollar held early gains despite a weaker-than-expected jobs report while its U.S. counterpart looked set for its biggest weekly gain in three months against a group of world currencies.
The day range on the loonie is 77.93 US cents to 78.21 US cents.
The Canadian dollar remained higher after Statscan said the economy shed 213,000 jobs last month, far more than expected. The currency has been supported this week by higher crude prices.
On world markets, the dollar index managed a two-month high in Asian trade. The index touched 91.60 for the first time since Dec. 1, before drifting back lower to 91.375 by 0853 GMT.
The index, which weighs the greenback against a group of world currencies, looks headed for a gain of more than 1 per cent for the week, its most since early November. The index finished last week up 0.3 per cent, according to Reuters figures.
The U.S. dollar was 0.2 per cent lower at 105.36 yen on Friday after earlier edging as high as 105.70 for the first time since Oct. 20.
The euro was 0.2 per cent higher at US$1.1981 after dipping to US$1.1952.
More company news
Héroux-Devtek Inc. beat expectations even as its profit and revenue in its most recent quarter fell compared with a year earlier. The maker of aircraft landing gear says it earned $8.5-million or 24 cents per diluted share for the quarter ended Dec. 31, down from $8.7-million or 24 cents per share a year earlier. Revenue totalled $150.3-million, down from $157.3-million a year earlier.
Johnson & Johnson said it has asked U.S. health regulators to authorize its single-dose COVID-19 vaccine for emergency use, and it will apply to European authorities in coming weeks. The drugmaker’s application to the U.S. Food and Drug Administration (FDA) follows its Jan. 29 report in which it said the vaccine had a 66% rate of preventing infections in its large global trial. The FDA said on Thursday evening that it has scheduled a meeting of its Vaccines and Related Biological Products Advisory Committee on Feb. 26, to discuss the company’s request for emergency use authorization.
PayPal Holdings Inc said on Friday it received a civil investigative demand from the U.S. Consumer Financial Protection Bureau related to its app Venmo’s alleged unauthorized fund transfers and collections processes.
Economic news
(830 a.m. ET) Canada employment report for January.
(830 a.m. ET) Canada merchandise trade deficit for December.
(830 a.m. ET) U.S. nonfarm payrolls for January.
(830 a.m. ET) U.S. goods and services trade deficit for December.
With Reuters and The Canadian Press
Terry Weber