The positive news from Statistics Canada on Friday that Canada added more jobs than expected in May was not enough to keep Canada’s main stock index on positive territories all morning and early afternoon. The data from the U.S. consumer price seemed to have created fears that the Federal Reserve would continue with its bullish policy tightening measures in a bid to control rising inflation.
For a market which closed on Thursday at 20,563.89, the Toronto Stock Exchange’s S&P/TSX composite index opened Friday’s trading with a sharp fall to 20,311.63, giving signs that it was set for a week of loss, which would bring its three-week winning streak to an end. By 9:44 a.m. ET, the index was down 183.47 points, or 0.89 per cent, at 20,380.42.
The Labor Department of the United States report showed that the U.S. consumer price index (CPI) had a one-per-cent monthly rise between April and May. In April, it had recorded a 0.3-per-cent rise. However, when judged on an annual basis between May 2021 and May 2022, the American CPI rose by a whopping 8.6 per cent, with gasoline prices hitting a record high and the cost of services rising.
In the Canadian stock market, healthcare and technology shares were at the forefront of the early morning loss during Friday’s trading, with an almost two per cent loss. The financials sector dropped 1.2 per cent, while industrials went down 1.1 per cent.
The energy sector lost 1.2 per cent, while the materials sector, which includes precious and base metals miners and fertilizer companies, shed 0.4 per cent.
For a market which opened on Monday at 20,929.78, Friday’s figures did not look promising during morning trading. Except for Tuesday, when the index opened at a high of 20,928.81, all the other days ended in negative territories. But Friday was heading to be the worst performer for the week. By 11.40 am ET, the index had been depressed further to 20,212.36, which was its lowest ebb during morning trading.
After that low point, the market tried to rally. But the upward movement was truncated by 12.07 pm when it hit 20,284.22. From that point until 1.00 pm, it did not return to winning ways. By 1.51 pm, its attempt to rise was also cut short at the same 20,284.22. By 2.21 pm, market forces stopped another spirited effort to increase again at 20,288.45, further indicating that the bears were bent on having the upper hands against the bulls in the day’s contest.
Friday’s trading saw the market losing 2.32 per cent in the week as at 3.00 pm.
By top 12.57 pm, the laggards on the market list were goeasy Ltd with a 7.79 per cent drop, followed by Shopify Inc. with 7.57 per cent. Methanex Corp. held the third position on the losers’ table with a 6.95 per cent drop.
However, even in the worst of times there are usually those who smile. Leading the list of equities with gains at 12.57pm was Endeavour Silver Corp. with a 7.54 per cent rise in share price. Fortuna Silver Mines Inc. was holding the second position with 7.44 gain, while Equinox Gold Corp. was maintaining the third position with 7.01 gain.
Meanwhile, as noted earlier, Canada had a good showing in employment rates in May, recording a net job gain of 39,800 in May, far surpassing earlier projections of an average of 30,000 jobs. According to Statistics Canada, these were entirely in full-time work. The jobless rate in Canada also dropped to 5.1 per cent, which was a record low, similarly beating predictions that it would remain flat at 5.2 per cent.
Full-time jobs of 135,400 were recorded in May, making up for a loss of 95,800 part-time positions. The services sector performed well, with gains led by accommodation and food services, while the goods sector recorded losses, mostly in manufacturing.
Overall, the gains in employment were driven by increases for women in the three main age groups (15 to 24, 25 to 54, and 55 to 64 years), while there was virtually no change in the employment rates among men in each of the groups.
On Thursday, Statistics Canada also reported that during the past year (April 2021 to April 2022), the price of food rose by 9.7 per cent. Canadians, the body said, had to pay much more for basic food staples, such as fresh fruit (+10.0 per cent), meat (+10.1 per cent) and fresh vegetables (+8.2 per cent). It added that with rising costs in other areas, such as shelter and transportation, Canadians have also been less able to budget money for food.
Since our last market summary on Tuesday, our investment-focused readers have shown more interest in companies in the mining and technology sectors:
Datametrex announced the acquisition of EV Connect Solutions Inc.
Probe Metals upsized its previously announced non-brokered private placement for gross proceeds of up to $10.5 million.
Finally, Mayfair Gold announced a non-brokered private placement for gross proceeds of $7,009,000.
Enjoy your weekend and keep a date with us next week.