Canada’s main stock index fell on Friday, led by big banks, as domestic jobs data was not considered strong enough to change the central bank’s interest rate outlook, while concerns of a trade war continued to mount.
The Toronto Stock Exchange’s S&P/TSX Composite Index fell 27.79 points, or 0.18 per cent, to 15,328.26. Of the index’s 10 main groups, seven were lower.
U.S. stock indexes opened lower on Friday as renewed fears of a trade conflict between the United States and China outweighed a lower-than-expected March jobs data that eased concerns over aggressive interest rate hikes.
The Dow Jones Industrial Average fell 234.05 points, or 0.96 per cent, to 24,271.17. The S&P 500 lost 22.96 points, or 0.862237 per cent, to 2,639.88. The Nasdaq Composite dropped 78.46 points, or 1.11 per cent, to 6,998.10.
Global stock markets edged downward after President Donald Trump threatened to slap an additional $100-billion in tariffs on Chinese goods and Beijing warned it would fight back “at any cost” with fresh trade measures.
Shares of Boeing, the single largest U.S. exporter to China, fell 1.5 per cent. Caterpillar also fell 1.5 per cent and Deere dropped about 1.6 per cent.
“Sure, this maybe a negotiation tactic, but how does this all play out is the nervousness and with the extreme volatility that we’re seeing, people are nervous about holding on to decisions,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
Facebook, Amazon, Netflix and Alphabet - the FANG group - were down in early trading, while Apple fell 0.4 per cent.
Chipmakers, which as a group rely on China for about a quarter of their revenue, also declined.
The list of decliners were similar to Wednesday’s, when the United States and China announced tariffs on $50-billion of each others’ imports.
Nonfarm payrolls increased by 103,000 last month, the Labor Department said, the fewest in six months, but a pickup in wage gains pointed to a tightening labor market.
Economists polled by Reuters had forecast the economy adding 193,000 jobs.
Average hourly earnings rose eight cents or 0.3 per cent last month, above the expected 0.2 percent increase. The unemployment rate held steady at 4.1 per cent for a sixth straight month.
“That’s not showing us wage inflation where the Fed would have to step in. This seems to be a natural improvement,” said Sean Lynch, co-head of global equity strategy, Wells Fargo Investment Institute in Omaha, Nebraska.
Investors will also tune into Fed Chairman Jerome Powell’s speech at an event later in the day for signs the central bank could raise rates more than the expected two more times this year.
Oil prices fell on Friday after U.S. President Donald Trump’s threat of new tariffs on China reignited fears of a trade war between the world’s two biggest economies.
Trump said on Thursday he had ordered U.S. trade officials to consider tariffs on an extra $100 billion of imports from China, escalating tensions with Beijing.
“There is a risk for oil prices that China uses the bazooka option it has on U.S. crude oil exports. China is the main importer (after Canada) of U.S. crude oil, to the tune of about 400,000 barrels per day,” Petromatrix said.
“If China was to impose counter tariffs on U.S. crude, it would become quickly very heavy for the U.S. supply and demand picture, resulting in U.S. crude oil price pressure that would have a negative impact on global oil prices.”
Brent crude for June delivery briefly traded flat at $68.33 per barrel after falling as much as 66 cents earlier.
U.S. West Texas Intermediate crude for May delivery erased some of its previous losses, but was still down 15 cents at $63.39 a barrel.
Both are headed for their biggest weekly fall since early March.