Canada Stocks: Toronto stocks subdued after US jobs data

Quebecor

06/09/2024 15:54

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      TSX flat 
    

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      US payrolls rise less than expected 
    

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      Enghouse Systems results above expectations, shares rise
    

  
 (Updated at 10:16 a.m. ET/ 14:16 GMT)
    By Nikhil Sharma
       Sept 6 (Reuters) - Canada's main stock index was flat on
Friday as the markets speculated the extent of U.S. interest
rate cut in September after mixed jobs data.
    At 10:16 a.m. ET (14:16 GMT), the Toronto Stock Exchange's
S&P/TSX composite index  .GSPTSE  was down 7.92 points, or
0.03%, at 22,980.36, and looked to register a weekly decline.
    U.S. nonfarm payrolls increased less than expected in
August, while the unemployment rate slipped to 4.2%, pointing to
an orderly labor market slowdown that does not warrant a hefty
rate cut by the Federal Reserve.
    While this data could push the case for a rate cut, but it
does not signal a deterioration in labor market conditions.
    "We're seeing what the Fed wants to see, which is a gradual
slowdown," said Allan Small, senior investment advisor at Allan
Small Financial Group with iA Private Wealth.
    Recession and labor market coming apart are not the base
case here, "the soft landing is the base case," Allan Small
added.
    Investors remain conflicted between a 25-basis-point cut and
a mighty 50-bps in September, odds of which are 53% and 47%,
respectively.  0#FEDWATCH 
    In Canada, the unemployment rate rose to 6.6% in August,
surging past a seven-year high excluding the pandemic years of
2020 and 2021.
    Meanwhile, the Canada Ivey Purchasing Managers seasonally
adjusted index fell to 48.2 in August from 57.6 in July, showing
a contraction in economic activity.
    These data show the domestic economy has slowed under higher
interest rates, which might push the Bank of Canada to further
reduce its benchmark rate after the Wednesday's 25-basis-point
cut.
    Canada's materials sector  .GSPTTMT  lagged its peers and
fell 0.9% as it tracked losses in gold and copper prices.  GOL/ 
 MET/L 
    The capped communications  .GSPTTTS  sector rose 0.9%,
supported by a 1.4% rise in communications firm Quebecor
 QBRb.TO .
    Among individual stocks, Enghouse Systems  ENGH.TO  climbed
3.3% to top the TSX index after the software and services
company posted better-than-expected third-quarter results.

 (Reporting by Nikhil Sharma in Bengaluru; Editing by Vijay
Kishore)
 ((Nikhil.Sharma@thomsonreuters.com;))