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Equities

Wall Street started higher Friday after new figures showed moderate U.S. job growth and declining unemployment. Canada’s main stock exchange also caught an updraft from the report, which helped ease investor concerns about the state of the global economy.

At 9:31 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 29.9 points, or 0.18 per cent, at 16,398.93.

The Dow Jones Industrial Average rose 70.66 points, or 0.27 per cent, at the open to 26,271.70.

The S&P 500 opened higher by 7.93 points, or 0.27 per cent, at 2,918.56. The Nasdaq Composite gained 36.17 points, or 0.46 per cent, to 7,908.44 at the opening bell.

The U.S. Labour Department said Friday that the U.S. economy created 136,000 new jobs last month. That was short of the 145,000 economists had been forecasting but still suggested contined growth. Meanwhile, August’s hiring gain was revised up to 168,000 jobs from the 130,000 originally reported. The Labor Department also said the unemployment rate fell to 3.5 per cent, its lowest in five decades.

U.S. futures had been negative ahead of the report but turned positive as investors weighed the latest figures.

“The U.S. labour market appears to still be on relatively healthy footing despite the downside miss on payrolls for September,” CIBC economist Katherine Judge said.

“The main negative was the flat average hourly earnings figure, which left the annual rate at its slowest pace in over a year at 2.9 per cent,” she noted. “Overall, these data are constructive enough to allow the Fed to skip October in our view, and cut in December.”

Weak U.S. and international economic reports have roiled markets earlier this week, triggering a two-day drop in the Dow totaling 800 points on Tuesday and Wednesday. Wall Street steadied on Thursday, closing in the black.

In the wake of Friday’s jobs report, U.S. short-term interest rate futures slipped. Traders are still pricing in a quarter percentage point rate cut by the Federal Reserve at its late October meeting. Odds of a cut in December are now about even.

Friday’s analyst upgrades and downgrades

On the corporate front, Nikkei Asian Review reports that Apple Inc. has asked suppliers to increase production of the new iPhone 11 models by as much as 8 million units or 10 per cent. The report, which cites unnamed sources, said a recent surge in orders for the new phone is concentrated in the cheapest iPhone 11 model as well as the iPhone 11 Pro model. Apple shares were up 1.8 per cent in early trading.

British oil giant BP announced that Bernard Looney, head of upstream business, will succeed Bob Dudley as chief executive officer. Mr. Dudley has been in the job for nearly a decade and plans to retire next year. Mr. Looney joined BP in 1991 as a drilling engineer.

Overseas, the pan-European STOXX 600 jumped 0.6 per cent in the wake of the sold U.S. jobs numbers, snapping a three-day losing streak. Britain’s FTSE 100 rose 0.79 per cent in afternoon trading. Germany’s DAX gained 0.58 per cent and France’s CAC 40 advanced 0.75 per cent.

In Asia, Japan’s Nikkei ended up 0.32 per cent. Hong Kong’s Hang Seng fell 1.11 per cent after the government invoked emergency laws that allow authorities to “make any regulations whatsoever” in the public interest. Reuters reports that could include curfews, censorship of the media and control of harbours, ports and transport.

Commodities

Crude prices were higher but still set for big weekly losses as concerns persist that weak global economic growth will crimp demand.

The day range on Brent so far is US$57.67 to US$58.35. The range on West Texas Intermediate US$52.26 to US$52.96.

Right now, Brent is down about 6.6 per cent on the week, its worst weekly showing since December. WTI is off about 6 per cent. That’s the biggest weekly drop for the U.S. benchmark since July.

“Oil is a good barometer for the health of the global economy, and the poor economic indicators posted this week points to softer demand in the future,” CMC Markets analyst David Madden said.

On Thursday, weak readings on the U.S. services sector and private hiring weighed on prices. As well, Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman said the kingdom had fully restored oil output after attacks last month knocked out more than 5 per cent of global crude supply.

“The oil market is doing little more than tracking risk sentiment,” AxiTrader strategist Stephen Innes said in a note.

“In these conditions, oil remains very very vulnerable to weaker U.S. macro data, but tempering the negative outlook is the X factor, positive trade rhetoric,” he said. “The hope here is that the U.S. and China can come to term on a rollback of tariffs.”

Meanwhile, economic worries continue to bolster gold prices, with bullion gaining for the fourth straight session. Spot gold was up 0.3 per cent at US$1,508.64 an ounce. On Thursday, gold hit US$1,518.50, its best level since Sept. 25. U.S. gold futures were flat at US$1,514.60.

“Given the slowdown in the global economy and geopolitical tensions, if weak data coming out of U.S. prompts the Fed to cut rates once again, gold will have the potential to touch the $1,600 mark,” Vandana Bharti, assistant vice-president of commodity research at SMC Comtrade, told Reuters.

Currencies

The Canadian dollar advanced after a Statistics Canada report showed this country’s trade deficit narrowed more than expected in August.

In the wake of the report, the loonied moved to the top of the day range of 74.97 US cents to 75.17 US cents.

In August, Canada’s trade gap narrowed to $955-million. Economists had expected a number closer to $1.2-billion. Exports rose 1.8 per cent during the month on increases in the energy and aircraft sectors. Imports were up 1 per cent on higher gold and crude oil imports, Statscan said.

“Canada’s trade balance looked better than at last check, but not by much,” CIBC economist Royce Mendes said in a note.

He noted the deficit for the previous month was revised to $1.4-billion from the $1.1-billion originally reported. He also said the increase in exports was mostly due to rising oil prices with volumes actually declining. Exports for autos were also down due to summer shutdowns.

“Imports also don’t suggest that domestic demand is heating up, with imports of gold the largest contributor to the gain in August and inbound shipments of consumer goods actually declining,” he said. “Overall, while the headline was slightly better than consensus and have short-end yields in Canada a touch higher, the details were somewhat softer.”

On broader currency markets, the U.S. dollar was steady. The U.S. dollar index slid to 98.816, down about 0.9 per cent after hitting its best level in more than two years earlier in the week. For the week, the index is down about 0.3 per cent.

The euro, which had been hit by worries Germany could slip into a recession, edged up 0.1 per cent to US$1.0970. The euro hit a two-and-a=half year low of US$1.0879 on Tuesday.

In bonds, the yield on the U.S. 10-year note was lower at 1.531 per cent. The yield on the 30-year note was also lower at 2.029 per cent.

More company news:

U.S. personal computer maker HP Inc says it will cut up to 16 per cent of its workforce as part of a restructuring plan aimed at cutting costs. The company will cut about 7,000 to 9,000 jobs through a combination of employee exits and voluntary early retirement, it said in a statement. HP estimates the plan will result in annual gross run rate savings of about $1 billion by the end of fiscal 2022, it added.

Shares of Costco Wholesale Corp. were down more than 1.9 per cent in early trading after the retailer’s latest quarterly sales fell short of analysts’ forecasts amid stiff competition in the sector. Comparable-store sales, or those recorded at Costco’s e-commerce platform and warehouses open for more than a year, rose 5.1 per cent,, excluding the impact of fuel and currency fluctuations. Analysts estimated a 5.25-per-cent rise, according to IBES data from Refinitiv. In the United States, comparable store sales, excluding fuel, rose 5.2 per cent, also missing the estimate of 5.32%.

Mexican airline Interjet is close to a deal to buy 12 Airbus A220 passenger jets to replace its partly grounded fleet of Sukhoi Superjet regional aircraft, industry sources told Reuters. Airbus, which already supplies larger A320-family jets to the airline, declined to comment.

Economic news

Canada’s trade deficit narrowed to $955-million in August. Economists had been expected a number closer to $1.2-billion.

U.S. non-farm payrolls rose by 136,000 last month, short of the 145,000 economists had been forecasts. However, the jobless rate for the month fell to a 50-year low of 3.5 per cent.

(10 a.m. ET) Canada's Ivey PMI for September.

(2 p.m. ET) U.S. Fed chair Jerome Powell speaks in Washington.

With Reuters and The Canadian Press

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 10:31am EDT.

SymbolName% changeLast
AAPL-Q
Apple Inc
-1.37%170.93
HPQ-N
HP Inc
-0.2%30.06
COST-Q
Costco Wholesale
-0.3%729.88

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