Canada’s main stock index opened higher on Friday after data showed unexpected job losses in April, raising the odds that the Bank of Canada will hold interest rates steady.
The Toronto Stock Exchange’s S&P/TSX Composite Index rose 25.09 points, or 0.16 per cent, to 15,984.59
The Canadian dollar was little changed against its U.S. counterpart on Friday, with the currency pulling back from an earlier three-week high after domestic jobs data tempered expectations for a Bank of Canada interest rate hike this month.
The decline of 1,100 jobs in April was well short of economists’ forecasts for an increase of 17,400. But full-time jobs rose by nearly 29,000 and wage growth accelerated.
“I think it will shave the currency a little bit,” said Doug Porter, chief economist at BMO Capital Markets. “Going into this report, the market had a strong probability of the Bank of Canada raising interest rates in May and I think this is going to cool some of that speculation.”
Chances of a Bank of Canada interest rate hike at the May 30 announcement slipped to 39 per cent from nearly 50 per cent before the jobs data, the overnight index swaps market indicated.
The Canadian dollar was trading nearly unchanged at $1.2764 to the greenback, or 78.35 U.S. cents. The currency touched its strongest since April 20 at $1.2730.
Wall Street indexes opened little changed on Friday as losses in Symantec and Nvidia offset gains in healthcare and telecom sectors.
The Dow Jones Industrial Average rose 19.11 points, or 0.08 per cent, at the open to 24,758.64. The S&P 500 opened lower by 0.37 points, or 0.01 per cent, at 2,722.70. The Nasdaq Composite dropped 11.01 points, or 0.15 per cent, to 7,393.97 at the opening bell.
Auto and healthcare stocks remain in focus as President Donald Trump is set to address issues related to the two sectors.
Mr. Trump will meet 10 major automakers, including the heads of General Motors, Ford and Fiat Chrysler, at the White House to discuss the fate of landmark fuel efficiency standards and a looming confrontation with California and other major states.
The president is also expected to renew his focus on controlling prescription drug prices in a highly anticipated speech at 2:00 p.m. ET that could lead to volatility in healthcare stocks.
“It’s relatively quiet in terms of drivers today. Trump’s speech really hasn’t had much of an impact on pharma or biotech thus far,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.
“Three of the four drivers that we had yesterday are still with us, benign 10-year (Treasury yields), oil and dollar, and technically breaking above the 100-day and 50-day on S&P was significant.”
The S&P 500 reclaimed its 100-day moving average on Thursday, suggesting to some traders that the market may move higher. A day earlier it had topped its 50-day moving average, an indicator of short-term momentum.
“When you have a breakout, it tends to have a follow through, but early indications look like we maybe a little bit behind on yesterday’s rally.”
The tech sector could be under pressure from a set of disappointing results, though Apple could give it some boost.
The stock was marginally up in premarket trading, putting it on course to extend a nine-day rally that has sent it to a record high.
Nvidia, the best performing chipmaker this year, fell 2 per cent after revenue from its closely-watched data center business missed analysts’ estimates.
The results could pressure shares of other chipmakers. Advanced Micro Devices was down 2.3 per cent.
Symantec Corp slumped 34.9 percent after the Norton Antivirus maker said it was investigating concerns raised by a former employee and reported full-year results below analysts’ estimates.