MARKET WATCH: Nov. 6

While investors were hoping for a clear election result, a definitive outcome looks to be days, if not weeks away, as both Biden and Trump await the final tallies in a number of battleground states.

Despite the uncertainty, U.S. stocks had their best day after a presidential election on record, led by a rally in tech shares Wednesday. The S&P 500 gained 74 points, its biggest one-day point gain since June, while the Nasdaq surged nearly 4%, gaining 430 points in its best single-day performance since April. Meanwhile, U.S. government-bond yields fell sharply Wednesday, as the prospects for a massive stimulus waned. The yield on the benchmark 10-year U.S. Treasury note declined 113 basis points to settle at 0.768%.

U.S. stocks surged again on Thursday, on track for their strongest weekly rally since April, as investors took a positive view of a potentially divided Congress. By Thursday’s close, the Dow was up 542 points, while the Nasdaq and TSX each added 300 points.

Finally, in currency news, the loonie hit a near two-month high against the greenback Thursday as the safe-haven dollar declined ahead of a Fed policy meeting to weigh the prospects for more stimulus. The loonie reached its strongest intraday level since early September, hitting 76.6 cents (US).

N.A. Markets Rebound Strongly

For the four trading days covered in this report, the Dow surged 1,889 points to close at 28,390, the S&P 500 climbed 240 points to settle at 3,510, while the tech-heavy Nasdaq jumped 980 points to close at 11,891. In Canada, the TSX rose 718 points to end at 16,298.

Strategy

Job growth slows in Canada as fall weather and re-imposition of containment measures restrict activity

The Canadian economy added 83,600 jobs in October, the lowest monthly total since the recovery began in May as the country contends with a second wave of COVID-19 cases and renewed lockdowns.

This month’s results mark a sharp deceleration from 378,000 jobs added in September, and average gains of 395,000 over the past six months, but still managed to exceed consensus expectations of 75,000 jobs. The unemployment rate fell to 8.9%, from 9% in September, the labour market has now recovered 2.4 million, or 79%, of the more than 3 million positions lost during March and April.

There are still more than one million Canadian workers without jobs or working significantly fewer hours because of the pandemic. Five provinces recorded employment increases while the re-tightening of new containment measures in Ontario and Quebec caused a stall in job growth in their respective economies.

The jobs report this morning did show evidence of permanent damage in the labour market with long-term unemployment, defined as those unemployed and who have been looking for work or on temporary layoff for 27 weeks or more, increased in both September and October. In October, longterm unemployed totaled 25% of all unemployed people.

There were some encouraging read-throughs, however, as hours worked grew by 0.8% month-over-month, suggesting a strong indicator for October GDP.

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by Scotia Wealth Management - The Zukiwsky Group

MARKET WATCH: Nov. 6

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