TORONTO 鈥� Canada's main stock index fell more than 300 points Friday despite strength in energy stocks as the price of oil climbed, while U.S. stock markets also fell as investors reacted to the latest labour market reports.
The S&P/TSX composite index closed down 305.63 points at 24,767.73.
In New York, the Dow Jones industrial average was down 696.75 points at 41,938.45. while the Nasdaq composite was down 317.25 points at 19,161.63. The S&P 500 index was down 91.21 points at 5,827.04.
Fresh labour market data in both Canada and the U.S. came in hotter than expected Friday.
For Canada, that鈥檚 good news, said Ilana Schonwetter, investment advisor and portfolio manager at Blueshore Financial.
The Canadian labour market added 91,000 jobs in December and the unemployment rate dipped to 6.7 per cent.
However, the Bank of Canada will need to see more than one month of positive change, she said.
鈥淚 think that we will need to see another two or three prints to see whether or not there has been a stabilization in that unemployment number or whether it was just an anomaly for that one month.鈥�
The Bank of Canada has been cutting interest rates aggressively, said Schonwetter, as the economy and labour market have faltered under higher rates. It鈥檚 expected to continue cutting in 2025.
Despite the positive surprise, Canadian markets were dragged lower Friday because of U.S. equities, which were reacting to their own country's labour market report.
U.S. job growth rose in December, while unemployment declined to 4.1 per cent.
In the U.S., stronger-than-expected data falls into the 鈥済ood news is bad news鈥� category right now, said Schonwetter.
With the U.S. Federal Reserve having already halved its forecast for interest rates in 2025 due to a resilient economy and jobs market, investors sold off in anticipation of potentially even fewer cuts than the two the bank projected last month.
鈥淭he core around the sell off today is really around that jobs report, and the consequences of that in the actions of the Federal Reserve,鈥� said Schonwetter.
鈥淚t definitely gives them less reason to act.鈥�
Schonwetter said Canadian and U.S. economic data and interest rate policies are expected to continue diverging in 2025.
鈥淭he Bank of Canada is absolutely in a much tougher spot,鈥� she said.
鈥淚f you think about the level of debt that is being carried by Canadians, the number of mortgages that are coming up for renewal, and then, of course, the potential of tariffs ... the uncertainty around all of this backdrop is quite unsettling for the Canadian investor.鈥�
The Canadian dollar traded for 69.34 cents US compared with 69.47 cents US on Thursday.
The February crude oil contract was up US$2.65 at US$76.57 per barrel and the February natural gas contract was up 29 cents at US$3.99 per mmBTU.
The February gold contract was up US$24.20 at US$2,715 an ounce and the March copper contract was down a penny at US$4.30 a pound.
鈥� With files from The Associated Press
This report by The Canadian Press was first published Jan. 10, 2025.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
Rosa Saba, The Canadian Press
