Canadian Market Declines Amid Strong Employment Data

The Canadian market experienced a notable decline due to rising bond yields and reduced hopes for Federal Reserve rate cuts. The report indicates stronger employment growth in both Canada and the U.S., impacting investor confidence in monetary easing.

Date: 11-01-2025

AI Rating: 5

Market Overview: The Canadian market closed notably lower, with the benchmark S&P/TSX Composite Index dropping 305.63 points or 1.22%. This decline is attributed to rising bond yields and diminishing optimism concerning possible interest rate cuts from the Federal Reserve, following stronger-than-anticipated employment data in the U.S.

Employment Data Impact: The employment figures in Canada showed a significant increase of 91,000 jobs in December 2024, with the unemployment rate declining to 6.7% from 6.8% in the prior month. Meanwhile, the U.S. non-farm payrolls surged by 256,000, contributing to a drop in the unemployment rate to 4.1%. These stronger readings may affect future monetary policies, potentially stifling expectations for any significant easing by the Bank of Canada or the Federal Reserve.

Sector Performance: The report highlights declines in several sectors, namely healthcare, financials, real estate, communications, and technology. Coupled with these losses were slight declines in materials, utilities, and consumer staples sectors. Conversely, energy stocks performed well, bolstered by a rise in oil prices following U.S. sanctions on Russia targeting major oil companies.

Company-Specific Performance: Among the companies affected, Rogers Communications, Shopify, Cameco Corporation, and several others faced declines between 2% and 4%. In contrast, Aritzia Inc saw a near 20% increase in shares, with adjusted net income jumping 57.5% to $83 million for the third quarter compared to the previous year. Other firms also reported impressive gains, showcasing a mixed market response.

Stocks: RY CM SHOP CNR