By James Langton
(September 3 – 14:00 ET) – Jobs data in the U.S. are far better than expected. That has produced a complete reversal of yesterday’s downside momentum.
The TSE 300 opened up about 75 points, and has drifted higher since then It is up about 93 points at midday. The bulls are certainly carrying the day throughout the market. Advances are outnumbering declines 8:5 The buying volume is ahead of the selling about 6:1, with just over 40 million shares changing hands.
The rather light trading suggests that the extreme bullish reaction may be overdone. Many economists are cautioning that one month of favourable data doesn’t mean the pressure is off the labour market. RBC Dominion Securities says that seasonal factors, not a fundamental change, are behind this month’s results. CIBC World Markets expects 50 basis points worth of rate hikes by the U.S. Federal Reserve Board over the winter.
Nevertheless, the bulls have the floor for now and they are running with it. Every subsector on the TSE is up, led by the interest-sensitive financials and conglomerates. Gold is the exception. TD Bank is up more than 4% in strong trading. Magna is up strongly, by about $2.25. Nortel and BCE are both up, along with most of the blue chips. JDS Uniphase has become the Canadian market darling of the moment, up a good $8 again today.
Montreal is up strongly too, more than 60 points. The rise comes in sympathy with eager traders in New York and Toronto. Alberta has added less than a point. Vancouver is up 1.3 points.
In New York, reaction to the jobs data has been exuberant. The Dow is up more than 220 points, sparking the upside trading curbs that haven’t been seen in a while. Nasdaq is up more than 80 points. The S&P has added about 35 ticks.