Market Watch: December 3

However, North American stocks and global oil prices registered their second significant declines in three sessions on Tuesday, as concerns once again mounted about the economic impact of a new COVID-19 variant. Brent crude was hit especially hard, falling nearly 4 per cent. That was bad news for the TSX, which lost nearly 500 points, or 2.3 per cent. In the U.S., the Dow and S&P 500 shed roughly 2 per cent, while the Nasdaq declined 1.5 per cent. Losses intensified Tuesday after Fed Chair Jerome Powell said the central bank would consider concluding its tapering process sooner, in an effort to battle rising inflation.

In economic news, Statistics Canada reported Tuesday that the Canadian economy rebounded in Q3 — after a surprise contraction in Q2 — as GDP increased at a 5.4 per cent annualized rate. Rising consumer spending helped drive the overall increase, with households spending more on semi-durable goods, like clothing, as well as services.

North American markets fell once again in a volatile trading session Wednesday. Although U.S. stocks initially rallied, markets surrendered ground after reports that new COVID-19 infections nearly doubled in South Africa Wednesday and that the Omicron variant had been identified in California. By Wednesday’s close, the Dow lost 462 points, erasing an intraday gain of more than 500 points. Meanwhile, the S&P 500 fell 54 points, the Nasdaq dropped 284 and the TSX shed 195.

It was a bounce-back day for markets Thursday as investors waded back in to stage a broad-based rally. The Dow jumped 618 points, while the S&P 500 and Nasdaq added 64 and 127 points, respectively. In Canada, the TSX surged nearly 300 points. Finally, initial U.S. jobless claims came in at 222,000, an increase from the previous week but lower than initial expectations.

North American Markets Slip For the four trading days covered in this report, the Dow dropped 259 points to close at 34,640, the S&P 500 fell 17 points to settle at 4,577, while the tech-heavy Nasdaq lost 110 points to close at 15,381. In Canada, the TSX declined 364 points to end at 20,762.

Strategy

Canada’s labour market rebounds strongly as unemployment supports were withdrawn in October

Canadian job growth blew out expectations in November as the end of income support programs helped fuel new hiring activity across the board. Employment rose 153,700 last month, more than quadruple the 37,500 predicted by consensus and up strongly from October’s 31,200 reading. The employment fell to 6.0 per cent, down from 6.7 per cent, while the participation rate was steady at 65.3 per cent. Job gains were evenly split between full-time (+79,900) and part-time work (73,800), while hourly wages registered growth of 3.0 per cent. Hours worked rose across most industries, led by manufacturing, wholesale and retail trade, as well as construction.

November’s gains reflect large numbers of people exiting unemployment ranks after Prime Minister Justin Trudeau’s government terminated its key support program for individuals in October. Unemployment levels fell by 122,000 last month, versus 56,200 in October. Much of that decline were people who were out of a job for 52 weeks or more. Labour markets are tightening sharply, and that positions the Bank of Canada to hike earlier than expected, though the presently unknown impact of the omicron variant could impact timing next year. Importantly, the survey results did not capture the impacts of the sever flooding that occurred in British Columbia and could result in some regional weakness in the December report.

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Market Watch: December 3

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