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U.S. stock futures were weaker early Friday as world shares fell on continuing worries about the global economy and signals that the U.S.-China trade dispute isn’t nearing a conclusion. On Bay Street, futures were slightly lower with crude prices heading for a weekly loss. The Canadian dollar got a lift after Statistics Canada reported that hiring last month was far stronger than markets had been expecting.

“President [Donald] Trump saying that he was not planning to meet with China’s President Xi Jinping before the March 1st trade truce deadline hit sentiment overnight,” Jasper Lawler, head of research for London Capital Group, said. "Asian markets tumbled the most in over a month as fears spread that the world’s two largest economies will not manage to hash together a trade deal before tariffs are due to rise."

After March 1, U.S. tariffs on Chinese imports are set to increase to 25 per cent from 10 per cent. Ahead of the North American open, MSCI’s all-country index was off for the third straight day, falling 0.3 per cent. It also looked like the index would post a weekly loss following six consecutive weeks of gains.

Global economic concerns are also weighing on markets after the European Commission cut its forecast for euro zone growth this year and next and the Bank of England cautioned that Britain faces its weakest growth in a decade this year.

On Bay Street, a key economics report will help set the tone. Statscan said early Friday that the Canadian economy generated 66,800 new jobs last month, far exceeding the 5,000 economists had been forecasting. The agency said most of the gains were seen among people aged 15 to 24 and in positions in services-producing industries. The Canadian dollar, which had been languishing near two-week lows in the predawn hours, jumped on the report, trading near the mid-75-US-cent mark.

On Wall Street, shares of Visa Inc. and rival Mastercard Inc. stock could get some attention after Visa sweetened its offer for payment system Earthport PLC to US$319-million. The move pushes past Mastercard’s earlier bid and sets up a showdown between the two. Earthport says it now recommends shareholders accept the Visa offer.

Overseas, European stocks were mixed on less optimistic signals over U.S.-China trade talks. The pan-European STOXX 600 was trading up a modest 0.02 per cent. Britain’s FTSE 100 edged up 0.09 per cent. France’s CAC 40 rose 0.22 per cent while Germany’s DAX slipped 0.01 per cent.

In Asia, stocks also struggled. Hong Kong’s Hang Seng, which returned to trading after being off much of the week for Lunar New Year, ended down 0.16 per cent. Japan’s Nikkei closed at its lowest level in a month, falling 2.01 per cent. The Broader Topix fell 1.89 per cent.

Commodities

Crude prices were narrowly mixed heading into the week’s final session with global economic worries weighing but the impact of OPEC production cuts and U.S. sanctions on Venezuela putting a floor under prices.

Brent crude was modestly positive in the predawn hours with a range of US$61.04 to US$61.97. West Texas Intermediate was sitting below breakeven and had a range for the day of US$520.8 to US$52.69. According to Reuters, Brent is heading for a weekly loss of about 1.5 per cent while WTI is looking at a decline of about 5 per cent for the week. The weekly decline in WTI prices would mark the biggest drop so far this year. Crude prices lost about 2 per cent during Thursday’s session.

“Crude fundamentals are not helping, as weekly data published by the U.S EIA mid-week showed an unwelcome increase in stocks of crude oil,” OANDA analyst Dean Popplewell said. " Crude bulls have been pinning their hopes on OPEC+ production and a squeeze on supply from Iran and Venezuela, due to U.S sanctions, would lead to the market being balanced this year. And another factor weighing on oil prices this week has been a stronger U.S dollar."

Gold prices, meanwhile, looked headed for their first weekly loss in three as the U.S. dollar finds its footing. Spot gold was steady at US$1,310.46 per ounce, after hitting its lowest since Jan. 29 at US$1,302.11 on Thursday. U.S. gold futures were up about 0.1 per cent at US$1,314.70.

“Ahead of the U.S open, gold is trading steady on worries that a prolonged Sino-U.S trade war could worsen global economic slowdown, but a strong dollar has put the yellow metal in line for its first weekly loss in nearly a month,” Mr. Popplewell said.

In other metals, silver and platinum prices were both slightly higher at US$15.73 and US$795.86 an ounce respectively.

Currencies and bonds

The Canadian dollar jumped after Statscan reported far stronger hiring last month than economists had been forecasting. Ahead of the report, the loonie had been trading at the low end of the day range of day range of 75.03 US cents to 75.54 US cents. After the numbers were released, the loonie jumped to the high end of that scale.

Statscan said the economy created 66,800 new jobs in January. Economists had been expecting a gain of about 5,000 positions. The jobless rate rose to 5.8 per cent from 5.6 per cent as more people entered the work force, the agency said.

“The details were relatively solid too, with the all of the jobs coming in paid employment and a slight tick up in wage growth despite Ontario’s minimum wage increase falling out of the annual calculation,” CIBC economist Royce Mendes said. “The unemployment rate did rise, but only because of an increase in the participation rate.”

Still, he said, despite the strong employment showing, the economy’s first-quarter growth is “setting up to be somewhat weak given what we know is happening in the oil patch.”

“So while today’s data will be bullish for the Canadian dollar and bearish for fixed income, the Bank of Canada is still likely on the sidelines for the first half of 2019,” Mr. Mendes said.

On global markets, the euro was heading for its biggest weekly drop against the U.S. dollar in four months on figures showing a spreading economic slowdown in Europe. After hitting a low of US$1.1323 on Thursday, the euro ended the day at US$1.1338. It was stuck around that level on Friday, according to Reuters.

The U.S. dollar index, meanwhile, was slightly higher with trade concerns dominating. At last check the index was little changed at 96.56.

In bonds, U.S. Treasury yields were lower with the yield on the 10-year note falling 2.645 per cent. The yield on the 30-year note was also down at 2.988 per cent.

Stocks set to see action

Bank of Nova Scotia says it has reached a deal to sell its banking and insurance operations in El Salvador, including Scotiabank El Salvador, its subsidiaries and Scotia Seguros, to Imperia Intercontinental Inc. Scotiabank says the transaction is expected to result in an after-tax loss of about $170-million, representing the carrying value of good will related to the business.

Hasbro Inc. shares were down more than 8 per cent ahead of the North American open after the toy maker reported a bigger-than-expected drop in quarterly revenue, hit by lost sales from the closure of Toys R Us in the United States. The company’s net revenue fell to US$1.39-billion in the fourth quarter ended Dec. 30 from US$1.6-billion a year earlier, while analysts were expecting US$1.52-billion, according to IBES data from Refinitiv.

Canadian private equity firm Brookfield Asset Management is in preliminary talks with India’s Reliance Industries to buy a stake in its optical fibre and telecom tower assets, The Times of India newspaper reported on Friday. Reliance Industries Ltd said in December it planned to separate its fibre and tower business from its telecom arm Reliance Jio Infocomm Ltd, commonly known as Jio. “The end objective of that is to find a different set of investors who would be wanting to run these kind of assets,” V Srikanth, joint chief financial officer of Reliance Industries said in January at the company’s quarterly results announcement.

Sony Corp announced its first-ever major share buyback on Friday, worth 100 billion yen (US$910-millon), helping its stock recover from a hammering days earlier when investors freaked over lacklustre earnings. The announcement marked Japan’s second major buyback this week after tech investor SoftBank Group Corp scheduled the repurchase of 600 billion yen in shares using proceeds from the IPO of its telecoms unit. Sony shares, which fell 14 per cent to their lowest in more than a year on disappointing numbers from its gaming business, finished up 4 per cent.

U.S. refiner Phillips 66 reported a more than four-fold surge in fourth-quarter adjusted profit, helped by low crude prices that boosted refining margins. On an adjusted basis, net income rose to $2.26 billion, or $4.87 per share, in the quarter, from $548 million, or $1.07 per share, a year earlier.

Shares of Coty Inc. jumped 17 per cent in premarket action after the cosmetics company said on Friday it expects to post a net profit in the second half of fiscal 2019 and reported quarterly revenue and adjusted earnings that beat estimates. In the second quarter, the company was helped by higher sales in its luxury segment, with strong holiday demand for the Gucci, Marc Jacobs and Burberry brands. Net loss attributable to Coty was US$960.6-million, or US$1.28 per share, in the second quarter ended Dec. 31, compared with a profit of US$109.2-million, or 15 US cents per share, a year earlier, as the company incurred an asset impairment charge.

Toronto-based CI Financial Corp. says it earned a fourth-quarter profit of $140.4-million as its revenue fell compared with the same period a year earlier. The investment manager says the profit amounted to 57 cents per diluted share for the quarter ended Dec. 31, compared with a profit of $139.5-million or 51 cents per diluted share a year earlier. Revenue totalled $529.2-million, down from $594.4-million. On an adjusted basis, CI says it earned 57 cents per share for the quarter, down from an adjusted profit of 63 cents per share a year earlier. Analysts on average had expected a profit of 57 cents per share, according to Thomson Reuters Eikon.

More reading:

Friday’s small-cap stocks to watch

Friday’s Insider Report: President of this large-cap dividend stock dumps over $2.4-million worth of shares

Economic news

The seasonally adjusted annual rate of Canadian housing starts fell to 207,968 in January, from 213,630 a month earlier, Canada Mortgage and Housing Corp. said. Urban starts fell by 2.1 per cent, the agency said.

Statscan says the Canadian economy generated 66,800 new jobs last month, far more than than economists had been forecasting. The jobless rate rose to 5.8 per cent from 5.6 per cent a month earlier as more people looked for work.

(10 a.m. ET) U.S. wholesale inventories for December. Estimate is a decline of 0.2 per cent from the previous month.

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
BAM-N
Brookfield Asset Management Ltd
+0.53%42.02
BAM-T
Brookfield Asset Management Ltd
+0.34%56.9
CM-N
Canadian Imperial Bank of Commerce
+1.3%50.72
MA-N
Mastercard Inc
+0.76%481.57
PSX-N
Phillips 66
+2.76%163.34
BNS-T
Bank of Nova Scotia
+0.94%70.07

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