Canada's TSX gains after surprise job losses bolster rate-hold outlook
SPY•The S&P/TSX Composite rose 0.92% to 35,462.14 after Canada lost 68,300 jobs in September, versus forecasts for a gain of 9,200. The data lowered the odds of a Bank of Canada rate hike at its next meeting to 27% from 40%.
1. Jobs data lifts stocks
Canada's S&P/TSX Composite Index rose 0.92% to 35,462.14 points on Friday as investors assessed September's weaker-than-expected jobs data. The economy lost a net 68,300 jobs, while analysts had forecast a gain of 9,200, and the unemployment rate edged up.
2. Rate expectations shift
The odds of a Bank of Canada rate increase at its next meeting fell to 27% from 40% after the report. Investors still priced in a 25-basis-point hike at the December meeting. Brian Madden, chief investment officer at First Avenue Investment Counsel, said the report would probably tip the balance toward the central bank holding rates at upcoming meetings rather than raising them.
3. Sector and company moves
Materials rose 2.8%, leading sector gains as gold advanced more than 1%, while eight of the TSX's 10 major sectors traded higher. Aritzia shares surged 16.7% after the apparel retailer topped analyst expectations for second-quarter revenue and profit. Despite Friday's gains, the index remained on track for a third straight weekly decline, with elevated bond yields and inflationary worries pressuring risk appetite.
