(Bloomberg) — Canadian equity markets rallied with U.S. markets after May jobs data for both countries came in better than expected.
The S&P/TSX Composite index rose as much as 1.9% in Toronto. Energy, financials and consumer discretionary stocks were among the top performers, while materials and tech were the worst performers.
Canada’s labor market unexpectedly strengthened after two-straight months of record losses as the country gradually reopens from Covid-19 related restrictions. The country added 289,600 jobs, Statistics Canada said Friday in Ottawa.
Still, the unemployment rate ticked up to 13.7% in May. Meanwhile, U.S. nonfarm payrolls rose by 2.5 million after a 20.7 million tumble the prior month that was the largest in records back to 1939, according to Labor Department data Friday. The jobless rate fell to 13.3% from 14.7%.
The rebound in jobs has caught bearish investors by surprise, but some market participants have expected such outcome. The sell-off has been “unlike any other,” Invesco senior investment strategist Talley Leger said in an interview with Bloomberg. “The good news is that activity can recover in some sectors, as quickly as it was shutdown and that could catch some of the negative observers off guard,” he said. Adding optimism that “its just matter of time until we get back to pre-covid levels.”
Bombardier Inc. plans to eliminate 2,500 jobs at its aviation division following a slump in demand for business jets. Manufacturing operations in Canada will bear the brunt of the cutbacks, to be carried out this year, Bombardier said in a release Friday. Overall, the group employs nearly 60,000 employees.
Meanwhile, the Canadian government has lent C$26.2 billion ($19.5 billion) to 655,000 small businesses so far through its Canada Emergency Business Account (CEBA) program, according to Maeva Proteau, press secretary to Finance Minister Bill Morneau.
Western Canada Select crude oil traded at a $8.75 discount to West Texas IntermediateSpot gold fell 1.8% to $1,683.35 an ounce
The Canadian dollar rose 0.8% to C$1.3392 per U.S. dollarThe 10-year government bond yield surged to 0.734%
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