The Canadian stock market is under pressure Friday morning, giving back the gains of the previous session. The weakness in commodities, especially in the price of gold, is having a negative impact on the market. A series of disappointing economic reports is adding to the negative mood. The Canadian trade deficit reached near record levels and building permits tumbled sharply.
The majority of the European markets are trading modestly higher Friday. Investors were cautious ahead of the release of the U.S. jobs report, but have since turned more positive.
The European Central Bank provided additional details about its quantitative easing program yesterday, which sparked a rally in the region. ECB President Mario Draghi revealed that the bank will purchase $66.3 billion worth of bonds each month beginning on March 9th. The central bank previously indicated that the $1.1 trillion asset purchase program is expected to continue until September of 2016.
Markets in the United States are also under pressure Friday. The highly anticipated jobs report for February showed stronger than expected job growth, which pushed the unemployment rate down to its lowest level in well over six years. The report has added to concerns about the Federal Reserve raising interest rates in the near future.
With employment in the U.S. climbing by much more than anticipated, the Labor Department released a report on Friday showing that the unemployment rate fell to its lowest level in well over six years in the month of February.
The report said non-farm payroll employment jumped by 295,000 jobs in February following a downwardly revised increase of 239,000 jobs in January.
Economists had expected employment to increase by about 230,000 jobs compared to the addition of 257,000 jobs originally reported for the previous month.
Subsequently, the Labor Department said the unemployment rate fell to 5.5 percent in February from 5.7 percent in January, coming in below economist estimates for a rate of 5.6 percent.
Reflecting a notable decrease in the value of imports, the Commerce Department released a report on Friday showing that the U.S. trade deficit narrowed in line with economist estimates in the month of January.
The report said the trade deficit narrowed to $41.8 billion in January from a revised $45.6 billion in December. The narrower deficit matched the consensus estimate.
The benchmark S&P/TSX Composite Index is down 43.85 points or 0.29 percent at 15,059.26.
On Thursday, the index closed up 20.27 points or 0.13 percent, at 15,103.11. The index scaled an intraday high of 15,189.10 and a low of 15,094.84.
The Gold Index is sinking by 4.66 percent . Gold prices tumbled Friday morning, extending recent losses after robust U.S. jobs growth cemented expectations the Federal Reserve will hike interest rates mid-year.
Goldcorp (G.TO) is declining by 6.34 percent and Barrick Gold (ABX.TO) is losing 4.14 percent. Eldorado Gold (ELD.TO) is dropping by 2.19 percent and Yamana Gold (YRI.TO) is down 5.86 percent. B2Gold (BTO.TO) is falling by 6.16 percent and Kinross Gold (K.TO) is decreasing by 5.81 percent. IAMGOLD (IMG.TO) is lower by 4.40 percent and Royal Gold (RGL.TO) is declining by 6.11 percent.
The Capped Materials Index is also losing 2.23 percent. Franco-Nevada (FNV.TO) is falling by 3.05 percent and Agnico Eagle Mines (AEM.TO) is lower by 6.74 percent. Silver Wheaton (SLW.TO) is declining by 2.66 percent.
The Diversified Metal and Mining Index is declining by 0.99 percent. First Quantum Minerals (FM.TO) is down 1.30 percent and Sherritt International (S.TO) is falling by 0.43 percent. Lundin Mining (LUN.TO) is lower by 1.91 percent and HudBay Minerals (HBM.TO) is dropping 1.03 percent.
The heavyweight Financial Index is increasing by 0.65 percent. Toronto-Dominion Bank (TD.TO) is gaining 0.85 percent and Canadian Imperial Bank Of Commerce (CM.TO) is up 0.18 percent. Royal Bank of Canada (RY.TO) is higher by 0.78 percent and Bank of Montreal (BMO.TO) is rising by 0.14 percent.
The Energy Index is falling by 0.14 percent. Crude oil prices fell Friday morning as the dollar continued its assault on major currencies after a strong U.S. jobs report.
Canadian Oil Sands (COS.TO) is decreasing by 0.09 percent and Crescent Point Energy (CPG.TO) is losing 0.94 percent. Canadian Natural Resources (CNQ.TO) is lower by 0.98 percent and Pacific Rubiales (PRE.TO) is decreasing by 1.66 percent. Encana (ECA.TO) is lower by 0.48 percent and Bonterra Energy (BNE.TO) is declining by 2.54 percent.
Suncor Energy (SU.TO) is up 0.65 percent and Vermilion Energy (VET. TO) is gaining 0.96 percent. Talisman Energy (TLM.TO) is also up 0.52 percent.
The Capped Health Care Index is increasing by 0.52 percent. Valeant Pharmaceuticals International (VRX.TO) is climbing by 0.78 percent and Catamaran (CCT.TO) is gaining 0.11 percent. Extendicare (EXE.TO) is also rising by 0.28 percent.
The Capped Information Technology Index is gaining 0.22 percent. Constellation Software (CSU.TO) is rising by 0.95 percent and Descartes Systems Group (DSG.TO) is higher by 0.65 percent.
Enghouse Systems (ESL.TO) is climbing by 2.85 percent. The company reported first quarter EPS of $0.09, compared to $0.23 a year ago.
Algonquin Power & Utilities (AQN.TO) is sinking by 8.96 percent, after it rescheduled the release of its fourth quarter results.
On the economic front, the Canadian trade deficit widened to C$2.45 billion in January, according to a report from Statistics Canada Friday morning. Economists had expected a deficit of C$1.00 billion. The trade deficit for December was also revised to C$1.22 billion, from the C$649 million that was originally reported.
Statistics Canada also reported Friday that Canadian building permits tumbled by 12.9 percent in January, to C$6.13 billion. Economists had expected a decline of 4.3 percent. The December result was also revised to a gain of 6.1 percent.
Canadian labor productivity for the fourth quarter dipped by 0.1 percent according to a report released by Statistics Canada this morning. Economists had expected no change in productivity, after the gain of 0.2 percent in the third quarter.
The Eurozone economy expanded as initially estimated in the fourth quarter on broad-based support from spending, investment and exports. Gross domestic product grew 0.3 percent sequentially, slightly faster than the third quarter's 0.2 percent expansion, second estimates from Eurostat showed Friday. The statistical office confirmed the estimate released on February 13.
Germany's industrial production grew for the fifth straight month in January signaling that growth is gaining a foothold in the biggest euro area economy, although orders data cast doubt over recovery.
Industrial production grew 0.6 percent in January from December, which was the fifth consecutive rise, data from Destatis showed Friday. This was also the first time since early 2011 that output rose for five straight months. The monthly rise in January was faster than a 0.5 percent rise forecast by economists, but slower than December's revised 1 percent growth.
The French trade deficit decreased unexpectedly in January, the customs office reported Friday. The trade gap widened to EUR 3.7 billion in January from EUR 3.3 billion in December and November. The deficit was forecast to narrow to EUR 3 billion.
In commodities, crude oil futures for April delivery are down $0.40 or 0.79 percent at $50.36 a barrel.
Natural gas for April is down $0.023 or 0.81 percent at $2.818 per million btu.
Gold futures for April are down $22.30 or 1.86 percent at $1,173.90 an ounce.
Silver for May is down $0.333 or 2.06 percent at $15.825 an ounce.
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