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Equities
Canada’s main stock index gained at the start of trading Friday helped by positive earnings from Bank of Montreal and a rise in crude prices. On Wall Street, key indexes started in positive territory with a disappointing reading on November hiring easing jitters over how quickly the Federal Reserve will tighten policy.
At 9:37 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 24.18 points, or 0.12 per cent, at 20,786.21.
In the U.S., the Dow Jones Industrial Average rose 52.99 points, or 0.15 per cent, at the open to 34,692.78.
The S&P 500 opened higher by 12.39 points, or 0.27 per cent, at 4,589.49, while the Nasdaq Composite gained 47.39 points, or 0.31 per cent, to 15,428.71 at the opening bell.
On Friday, markets got jobs data on both sides of the border.
In the U.S., the economy generated 210,000 new jobs in November. That fell short of the roughly 500,000 positions markets had been forecast. However, the unemployment rate fell to 4.2 per cent.
“While hiring in the payrolls report may have disappointed market expectations, it is clear that the U.S. labor market is getting tighter.,” TD senior economist Leslie Preston said. “The unemployment rate is now at late 2017 levels, when the job market was considered pretty healthy.”
In Canada, hiring in November handily beat market forecasts. Statistics Canada says the number of jobs created by the economy grew by 154,000 positions. The jobless rate fell to 6 per cent.
“The jobs gain suggests that, even if GDP isn’t near its prior trend, labour markets are tightening sharply, and that positions the Bank of Canada to hike earlier than we had expected, although the impact of Omicron is of course still creating a significant degree of uncertainty to any such forecasts,” CIBC senior economist Royce Mendes said.
On the corporate side, Bank of Montreal released earnings ahead of the bell, marking the last of Canada’s biggest banks to report.
BMO’s net income excluding one-off items rose to $2.23-billion, or $3.33 per share, in the three months ended Oct. 31, compared with $1.61-billion, or $2.41 per share, a year earlier. Analysts had expected $3.21 a share, according to IBES data from Refinitiv. The bank also hiked its dividend 25 per cent to $1.33, up from $1.06 in each of the last six quarters. BMO shares were up nearly 3 per cent in early trading in Toronto.
The Globe’s James Bradshaw reports that fourth-quarter profits moved in opposite directions at Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, continuing a string of mixed earnings for Canada’s banks as they respond to an uncertain economic outlook. TD and CIBC released results on Thursday.
Overseas, the pan-European STOXX 600 was up 0.29 per cent by midday. Britain’s FTSE 100 gained 0.37 per cent. Germany’s DAX and France’s CAC 40 advanced 0.31 per cent and 0.37 per cent, respectively.
In Asia, Japan’s Nikkei finished up 1 per cent. Hong Kong’s Hang Seng slid 0.09 per cent. Tech stocks in Hong Kong fell after Chinese ride-sharing giant Didi Global announced plans to delist from the New York Stock Exchange just six months after its debut. The company plans to list in Hong Kong.
Commodities
Crude prices gained in early going after OPEC+ members kept their current production plan in place but indicated they will continue to monitor the developments with the Omicron variant and the potential market impact.
The day range on Brent is US$69.53 to US$72.10. The range on West Texas Intermediate is US$62.43 to US$68.71. Both benchmarks gained more than 1 per cent during the previous session and were up by more than 2 per cent early Friday morning.
On Thursday, the OPEC+ group agreed to continue with their plan to increase production by 400,000 barrels a day in January. However, they also indicated that they could convene again ahead of the planned Jan. 4 meeting if market conditions make it necessary.
“OPEC+ has left a huge poison pill in their statement, retaining the right to convene an immediate meeting and to change their mind if omicron continues to send oil prices lower,” OANDA senior analyst Jeffery Halley said.
“That has made it dangerous to be short at these levels and the net effect was to lift prices higher, after the market sold immediately on the headline, before reading the small print.”
In other commodities, gold prices were heading for a third consecutive weekly loss as recent hawkish Fed comments suggest a sooner-than-expected end to pandemic era asset purchases.
Spot gold was down 0.2 per cent at US$1,766.03 per ounce early Friday, after hitting its lowest in nearly a month on Thursday.
U.S. gold futures rose 0.3 per cent to US$1,767.10.
“Gold’s inability to rally with skyrocketing risk aversion, a weaker U.S. dollar or weaker U.S. yields remains deeply concerning,” Mr. Halley said.
Currencies
The Canadian dollar recouped early losses and turned higher in early going after a much-stronger-than-expected reading on hiring in November.
The day range on the loonie is 77.74 US cents to 78.48 US cents.
The Canadian dollar advanced after Statscan reported that this country’s economy added 154,000 new jobs last month, easily beating market forecasts.
“Today’s data helps to keep the Bank of Canada on track to continue with its normalization path, although near-term downside risks have become more prominent recently given the emergence of the Omicron variant,” Ima Sammani, FX market analyst at Monex Canada, said.
“On balance, however, the progress in the labour market and inflationary pressures could position the Bank of Canada for earlier normalization, especially given GDP is not near pre-pandemic levels yet but the labour market is already tightening sharply.”
On world markets, the U.S. dollar index, which measures the greenback against six major peers, gained 0.2 per cent to 96.283, putting on course for a weekly advance. That would be a sixth weekly gain, the longest stretch since January 2015, according to figures from Reuters.
The euro slid 0.1 per cent to US$1.1291, consolidating after its drop to an almost 17-month low at US$1.1186 last week. Britain’s pound was down 0.2 per cent at US$1.3271.
The Australian dollar dropped 0.5 per cent to a new 13-month low of US$0.7055, falling for a fourth consecutive session.
In bonds, the yield on the U.S. 10-year note was lower at 1.431 per cent ahead of the North American opening bell.
More company news
CWB Financial Group raised its dividend as it reported its fourth-quarter profit rose compared with a year ago to beat expectations. The Edmonton-based bank says it will now pay a quarterly dividend of 30 cents per share, up from 29 cents. The increased payment to shareholders came as CWB said it earned a profit attributable to common shareholders of $90-million or $1.01 per diluted share for the quarter ended Oct. 31, up from a profit of $63.4-million or 73 cents a year earlier. Revenue totalled $260.6-million, up from $236.6-million in the same quarter last year.
Economic news
(8:30 a.m. ET) Canadian employment for November.
(8:30 a.m. ET) U.S. nonfarm payrolls for November.
(9:45 a.m. ET) U.S. Markit services/composite PMI for November.
(10 a.m. ET) U.S. factory orders for October.
(10 a.m. ET) U.S. ISM services PMI for November.
With Reuters and The Canadian Press
Terry Weber