TORONTO — Canada's main stock index fell more than one per cent Thursday with weakness in financials, industrials and telecom helping bring the market down.
The S&P/TSX composite index was down 259.81 points at 20,086.72.
In New York, the Dow Jones industrial average was down 543.54 points, or 1.7 per cent, at 32,254.86. The S&P 500 index was down 73.69 points, or 1.9 per cent, at 3,918.32, while the Nasdaq composite was down 237.65 points, or 2.1 per cent, at 11,338.35.
The markets are still digesting comments from Federal Reserve chairman Jerome Powell earlier this week indicating the central bank may have to be more aggressive with rate hikes still than investors had hoped, said Anish Chopra, managing director with Portfolio Management Corp.
“They’re still concerned about inflation. So it looks like higher for longer is the message,” he said.
While U.S. jobless claims data released Thursday held a glimmer of hope as claims ticked upwards, signalling potential weakening in the labour market, investors are waiting for non-farm payroll data Friday to get a better sense of whether the labour market has cooled at all from January’s surprise numbers, Chopra said.
“There’s been some concern among investors that the strong U.S. labour market will continue,” he said, adding that the market has been pricing in a bigger hike for the Fed’s March decision after Powell’s comments.
“Unless there’s a big surprise either way on the jobs number tomorrow, the markets are looking for a 50 basis point rise by the Fed,” Chopra said.
Markets are expecting again a boost of roughly 200,000 jobs in February, he said, but that guess was blown out of the water last time and could be again.
Canada will also get updated employment data Friday after the central bank held rates steady Wednesday for the first time in a year.
Senior Deputy Governor of the Bank of Canada Carolyn Rogers said in a speech Thursday that the central bank is prepared to raise rates further if data shows inflation won’t decline in line with its forecast. But so far, things are “unfolding broadly in line” with the bank’s outlook despite continued tightness in the labour market, Rogers said.
The Bank of Canada was the first major central bank to pause its tightening, said Chopra, but it’s data-dependent like its U.S. counterparts and will continue to watch the labour market and other key figures for future decisions.
The Canadian dollar traded for 72.52 cents US compared with 72.54 cents US on Wednesday.
The April crude contract was down 94 cents at US$75.72 per barrel and the April natural gas contract was down a penny at US$2.54 per mmBTU.
The April gold contract was up US$16.00 at US$1,834.60 an ounce and the May copper contract was up a penny at US$4.04 a pound.
This report by The Canadian Press was first published March 9, 2023.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD=X)
Rosa Saba, The Canadian Press
