September 4, 2015
Stocks in Toronto and New York extended their losses on Friday, after jobs reports issued by both Canada and the U.S. failed to provide a definitive picture of the economy.
At the end of the day, the TSX was down 118 points at 13,478. The main Toronto index is down 5.7 per cent in the past month, though it’s climbed back from the low of 12,705 it hit on Aug. 24.
Similarly, the Dow composite index plunged 272 to 16,102, compounding a month of losses that have taken the index down 7.3 per cent in the past month.
The U.S. jobs report issued earlier today showed unemployment at a seven-year low in August. But employers added just 173,000 jobs, a slower pace than expected.
That meant traders see no clear direction on interest rates for the Federal Reserve. The slowing pace of hiring and the deteriorating Chinese economy could prompt the U.S. central bank to delay a rate hike.
But many analysts believe the Fed will move in September. And it’s the uncertainty that causes markets to fluctuate.
Jobs and oil
In Canada, the unemployment rate rose to seven per cent, even though 12,000 jobs were created. That’s because more people began looking for work.
But again, it was a cloudy picture: Is Canada creating enough jobs to say it may be pulling out of recession or does the higher unemployment rate indicate further hard times?
Oil was providing no clear direction for Toronto stocks, with West Texas Intermediate crude sinking 76 cents to $45.99 US and Brent crude slipping below $50 US.
The Canadian dollar slid one half of a cent to 75.38 cents US.
August’s stock volatility was prompted by fears that the Chinese economy, the second largest in the world, was slowing. China devalued the yuan, shaking currency markets. Then its stock market began a downward spiral after a year of stratospheric climbing, undermining confidence in the market system.
Read the full post in CBC Business News
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