By Scotia Wealth Management - The Zukiwsky Group

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MARKET WATCH: Oct. 9

Oct 9, 2020 | 1:55 PM

Big Picture

Trump News Takes Hold of Financial Markets

It’s been a Trump-centric week for financial markets–and world news in general–as all eyes have been predominantly focused on U.S. President Donald Trump, who last week tested positive for Covid-19 and was hospitalized Friday. Although conflicting health reports continued over the weekend, U.S. stocks rose sharply on Monday, as investors were calmed after it was reported that Trump would be leaving Walter Reed Hospital Monday evening. By Monday’s close, the Dow was up nearly 470 points, while the TSX gained over 200, as crude prices climbed more than 5%.

Although U.S. markets were up for most of Tuesday’s trading, U.S. stocks fell sharply late Tuesday after Trump reportedly ended negotiations with Democrats over a new economic relief package until after election day. The news hit especially hard given that Fed Chair Jerome Powell, just hours earlier, had warned of potentially tragic economic consequences if the administration doesn’t provide more relief to households and businesses hit hard by the pandemic. In response, the Dow fell 376 points, while the TSX dropped 218, led lower by the materials sector and declining gold prices.

Trump news once again held U.S. markets in thrall Wednesday after the U.S. President reversed course and appeared to soften his position on a possible relief package before the November election. The news sent U.S. markets surging, with the Dow adding 531, while the Nasdaq climbed 210. It was also a strong day for the TSX, which climbed nearly 200 points. Cautious optimism over the aforementioned relief package again modestly boosted all four N.A. markets on Thursday. In U.S. economic news, the number of U.S. job postings fell in September from a month earlier, after posting solid gains during the summer, according to Glassdoor.com. Meanwhile the U.S. posted its largest monthly trade deficit since August 2006, the Commerce Department said Tuesday, as exports of services and manufacturing products stalled. Finally, the number of new jobless claims remains high at 840,000 for last week, once again outpacing economists’ estimates.

Prevention, Access, Recovery, and Coordination

Safe Harbour officially hands over shelter keys, establishes accessible navigation hub

12h ago

lacombe and sylvan lake

December 2025 (un)employment data released for Alberta sub-regions

14h ago

21 years with WCPS

Darcy Blum appointed principal of Lacombe Outreach School

15h ago

N.A. Markets Register Strong Gains

For the four trading days covered in this report, the Dow surged 742 points to close at 28,425, the S&P 500 was up 99 points to settle at 3,447, while the tech-heavy Nasdaq jumped 346 points to close at 11,421. In Canada, the TSX added 335 points to end at 16,534.

Strategy

The Canadian economy records a fifth straight month of job growth

The Canadian labour market posted a solid month of job growth in September as the net change in employment rose 378.2k, more than double the median estimate of 150k while the unemployment rate fell 1.2 percentage points to 9.0% and the participation rate edged higher to 65%. September marked the fifth consecutive month of job gains, and the labour market has now recovered three quarters of the three million jobs lost during March and April. Today’s figures shows the Canadian economy continues to recover as the job gains were widespread across industries, with increases in manufacturing, education and accommodation. Indeed, the majority of jobs added last month were in full-time work (334k FT vs. 44.2k PT). Employment increased in every province except New Brunswick and Prince Edward Island in September, with the largest gains observed in Ontario and Quebec. Rising COVID-19 case rates in major centers may result in slower job growth trends as we enter the winter months, though we expect provincial and local governments to maintain a watchful eye and re-tighten containment measures as needed. In all, barring a reintroduction of lockdown conditions, we do not expect to see a period of job shedding.

Encouragingly, employment among core-aged women (25-54 years old) increased for a fifth successive month (134k, 2.3%) in September, outpacing core-aged men. The increase was split fairly evenly between full-time and part-time work. This group has now seen their employment rate climb to within 2.1% of pre-crisis levels, the closest of all major demographic groups. We think this is attributable to schools re-opening. Employment growth was strong for young women (62k or 5.7%) and men (66k or 6.0%) aged 15 to 24 in September. Despite these increases, employment for Canadian youth remained 10% below February levels, much further behind the recovery than in the other major demographic groups. Canadians are slowly returning to their workplace, as the percentage of people working their normal hours from home edged down to 25.6% in September from 26.4% last month. Lastly, the number of Canadians who were employed but worked less than half their usual hours for reasons related to the health crisis fell by 108k (-7.1%) in September.

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