North American markets broke a three-day winning streak but ended the week higher on mixed jobs reports on both sides of the border.
While the U.S. unemployment rate dipped to a 40-year low that has spurred wage pressure, that’s not the case in Canada even as the jobless rate continues to ease, said Jonathan Pinsler, a portfolio manager and senior vice-president at TD Wealth.
He said there’s concern that wage increases may bolster the U.S. Federal Reserve’s confidence about raising interest rates, while rates aren’t expected to rise in Canada until the new year.
Corporate reports and geopolitical issues also presented their own signals.
The world’s largest company reported good results late Thursday, but Apple’s softer outlook over the holidays and in China spooked investors.
Apple’s shares fell nearly 7% and took the U.S. technology group with it.
“There’s a lot of data that’s coming out that is continuing to provide trepidation about the market environment,” Pinsler said in an interview.
Fears of waning global demand and softer consumer spending in China is an ongoing concern of investors, he said.
The S&P/TSX composite index closed down 30.87 points to 15,119.28 after hitting a high of 15,222.91 on 264.1 million shares traded. After three strong days, it closed the week up 1.5%.
Energy, telecommunications and technology led on the downside.
In New York, the Dow Jones industrial average was down 109.91 points at 25,270.83. The S&P 500 index was off 17.31 points to 2,723.06, while the Nasdaq composite was down 77.06 points at 7,356.99.
Pinsler said markets are still very fragile despite decent earnings reports.
“It’s the outlook that’s creating some angst in the market, so I think this week has just been a week of a little bit of a rebound from a terrible month,” he said.
The Canadian dollar traded at an average of US76.31¢ compared with an average of US76.41¢ on Thursday.
The December crude contract was down US55¢ at US$63.14 per barrel and the December natural gas contract was up US4.7¢ at US$3.28 per mmBTU.
Oil prices fell because of oversupply of energy around the globe.
“OPEC has been pumping oil in expectation that the embargo was going to hold,” he said.
But new information on next week’s reinstatement of the U.S. embargo against Iran will allow eight countries to continue to get oil from that country.
The December gold contract was down US$5.30 at US$1,233.30 an ounce and the December copper contract was up US8.55¢ at US$2.81 a pound.