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Equities

Canada’s main stock index was trading lower Friday as crude prices pulled back and looked set to end a volatile week in the red. Wall Street’s main indexes traded higher, holding in record territory, helped by gains in tech shares although a tepid reading on the jobs markets in December put a ceiling on the advance.

At 9:37 a.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was down 29.59 points, or 0.17 per cent, at 17,205.98.

In the U.S., the Dow Jones Industrial Average rose 20.62 points, or 0.07 per cent, at the open to 28,977.52. The S&P 500 opened higher by 7.11 points, or 0.22 per cent, at 3,281.81, while the Nasdaq Composite gained 29.52 points, or 0.32 per cent, to 9,232.95 at the opening bell.

“Tensions between the U.S. and Iran appear to have eased almost as quickly as they escalated, which has come as a massive relief to investors around the globe," OANDA senior analyst Craig Erlam said. “The rotation into safe havens has basically unwound at this point but given recent events, they will be prone to repeat occurrences.”

He also said reports that an Iranian missile may have brought down a Boeing airliner that killed 176 people sent shock waves around the globe but investors aren’t viewing the news at this point as a sign of conflict in the region once again escalating. Iran on Friday rejected the claims.

MSCI’s all-country index rose 0.1 per cent early Friday to touch a record level. At the same time, safe-haven holdings like gold and the Japanese yen were lower.

On the jobs front, Statistics Canada said this country’s economy added 35,200 new jobs last month, with the unemployment rate falling 0.3 percentage points to 5.6 per cent. Economists had been expecting a slightly more modest gain of 25,000 jobs in December. The agency said employment increased in Ontario, Quebec, Manitoba and Prince Edward Island. Statscan said full-time hiring rose by 38,400 jobs while part-time employment fell by 3,200 positions.

“After two months of woe, Canada’s job figures roared back, making up half of the prior month’s decline in employment and sending the jobless rate back to whence it came,” CIBC chief economist Avery Shenfeld said. “The 35,000 jobs gain was all in full time private sector paid jobs, and the 5.6 per cent unemployment rate (vs 5.9 per cent the prior month) is not quite back to its lows but is in the range considered to be full employment.”

Speaking in Vancouver on Thursday, Bank of Canada Governor Stephen Poloz attributed a return of strength in the housing market to healthy employment and wage growth along with immigration driven population gains.

South of the border, nonfarm payrolls increased by 145,000 positions, fewer than markets had been forecasting. Economists had been expecting gains of about 160,000 positions. The U.S. jobless rate, however, held near 50-year lows of 3.5 per cent.

On the corporate front, Corus Entertainment Inc. reported earnings per share in the most recent quarter of 37 cents on revenue of $467.9-million. Adjusted earnings per share in the first quarter totalled 38 cents. Corus shares were up more than 2 per cent in early trading in Toronto.

Overseas, the pan-European STOXX 600 edged up 0.10 per cent in afternoon trading. Britain’s FTSE 100 was little changed. France’s CAC 40 rose 0.08 per cent. Germany’s DAX added 0.24 per cent.

In Asia, Japan’s Nikkei added 0.47 per cent. The Shanghai Composite Index slid 0.08 per cent. Hong Kong’s Hang Seng ended the week up 0.27 per cent.

Commodities

Crude prices pulled back on the receding threat of war in the Middle East with both Brent and West Texas Intermediate heading for weekly losses.

The day range on Brent so far is US$65.05 to US$65.46. The range on WTI is US$59.22 to US$59.65.

After a volatile week, Brent crude now looks set for a weekly decline of about 6 per cent. It would be Brent’s first weekly drop in six. WTI looked set for a 6-per-cent drop from last Friday’s closing price. It would also be the first decline in six weeks for the U.S. benchmark.

“Oil prices dropped on Friday extending days of losses as the threat of war in the Middle East receded, and investors switched attention to economic growth prospects and the rise in U.S. crude oil and product inventories,” AxiTrader strategist Stephen Innes said.

“But things haven’t strayed too far south suggesting markets have seemingly found a tentative geopolitical risk balance. On the one hand, we are only 48 hours away from what appeared to be a full-blown U.S.-Iran war, so it’s difficult to be cheerful, especially given the existing levels of risk.”

Earlier this week, the U.S. Energy Information Administration posted a surprise increase in U.S. crude stocks, with inventories seeing the biggest weekly rise in nearly four years. The EIA said crude inventories for the week ended Jan. 3 rose by 1.2 million barrels. Analysts had been expecting a decline of about 3.7 million barrels.

Gold prices, meanwhile, edged lower. Spot gold fell 0.1 per cent to US$1,550.66 per ounce. U.S. gold futures eased 0.2 per cent to US$1,551.60.

“The [U.S.] dollar has rebounded over the course of this week which may keep the downward pressure on the yellow metal although it’s worth remembering that prior to the events of the last week, the dollar was coming under a little pressure and supporting gold,” OANDA’s Craig Erlam said. “It will be interesting to see whether that continues going forward.”

Currencies

The Canadian dollar jumped after a better-than-expected reading on hiring in December.

The loonie rose to the upper end of the day range of 76.48 US cents to 76.74 US cents after Statistics Canada said the economy added 35,200 jobs last month. Economists had been expecting a gain closer to 25,000 positions. The jobless rate fell to 5.6 per cent from 5.9 per cent.

The jobs numbers come a day after Bank of Canada Governor Stephen Poloz’s most recent comments on the economy. RBC chief currency strategist Adam Cole said Mr. Poloz’s remarks were dovish relative to those made in December but he still only went so far as to describe recent data as mixed. Mr. Poloz, he said, also indicated he was waiting to see if weakness in manufacturing was spreading to other sectors.

“Today’s data is consistent with Governor Poloz’s remarks yesterday, where he played it cool,” Brian DePratto, senior economist with TD, said. "Some aspects of the jobs data, such as wages, have been performing well, while others, such as hours, have not been.

“It seems we’ll have to wait for this month’s Monetary Policy Report (Jan. 22) to see where the governor and his team land in interpreting these and other recent trends.”

On world markets, the Australian dollar gained a third of a per cent to 68.76 US cents though strength was curbed on rising bets of an interest rate cut as early as February due to weeks of bushfires that have cast a shadow over the broader economy, according to Reuters. The New Zealand dollar rose 0.2 per cent to 66.22 US cents.

Against a basket of world currencies, the U.S. dollar gained 0.6 per cent on the week, its biggest weekly gain since early November. The U.S. dollar index was steady at 97.44 early Friday.

More company news

The Globe’s Tim Kiladze reports that TMX Group Ltd. chief executive Lou Eccleston is retiring early after historical allegations of sexual harassment came to light late last year. In November, an investigative story about Michael Bloomberg published in American outlet Business Insider uncovered allegations of sexual harassment against Mr. Eccleston while he was an executive at Bloomberg in the 1990s. TMX has since launched an “expedited but thorough investigation,” according to the company, and on Friday the board said that the probe “found no evidence that Mr. Eccleston engaged in sexual harassment or sexual misconduct while employed at TMX.”

The Globe’s Susan Krashinsky Robertson reports that Tim Hortons has hired a senior marketing executive from one of its biggest rivals at a time when competition in the coffee sector has presented challenges for the brand. On Friday morning, the coffee-and-doughnut chain’s parent company, Restaurant Brands International Inc., announced that Hope Bagozzi has left as director of marketing for McDonald’s Restaurants of Canada Ltd. to become Tim Hortons’ new chief marketing officer. Ms. Bagozzi, who joined McDonald’s in 2004, will be responsible for product development, customer analytics, marketing and advertising.

Eli Lilly and Co said it would buy Dermira Inc for about US$1.1-billion in cash to get access to the drug maker’s skin disease drugs. Lilly will pay US$18.75 per share, or a 2.2-per-cent premium to Dermira’s last closing price, the companies said in a joint statement.

U.S. theme park operator Six Flags Entertainment Corp on Friday raised the possibility of terminating all of its projects under construction in China due to the growing debt problems of its local partner, sending its shares down 16 per cent. Six Flags said in a regulatory filing its partner in China, real estate developer Riverside Investment Group, had defaulted on its payments to the company due to a declining market.

Economic news

The Canadian economy added 35,200 new jobs in December. The unemployment rate fell to 5.6 per cent.

The U.S. economy added 145,000 positions. The jobless rate held at 3.5 per cent in the final month of the year.

(10 a.m. ET) U.S. wholesale inventories for November.

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 4:00pm EDT.

SymbolName% changeLast
LLY-N
Eli Lilly and Company
-0.03%777.96
DERM-Q
Journey Medical Corp
-5.4%3.68
QSR-T
Restaurant Brands International Inc
+0.21%107.57

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