Equities in our part of the world came out of the chute higher on Friday, steered by rising oil prices on the decision by the Organization of the Petroleum Exporting Countries to have discussions on extending oil output cuts on Saturday, while tentative signs of a rebound in domestic jobs bolstered sentiment.
The S&P/TSX Composite Index screamed higher 315.13 points, or 2%, to kick off the week’s last session at 15,843
The Canadian dollar jumped 0.29 cents at 74.40 cents U.S.
Bombardier said it would cut 2,500 jobs at its aviation unit and take a related charge of $40 million this year, as the COVID-19 pandemic hurts sales. The plane maker saw its shares lose a penny, or 2.1%, to 47.5 cents.
CIBC raised the price target on Autocanada to $9.00 from $5.00. Autocanada shares popped 81 cents, or 8.2%, to $10.74.
CIBC cut the price target on Saputo to $38.00 from $40.00. Saputo shares docked seven cents to $33.05.
CIBC cut the price target on Stingray Group to $7.00 from $8.00. Shares in Stingray acquired eight cents, or 1.7%, to $4.71.
On the economic beat, Statistics Canada reported, employment rose by 290,000 (or 1.8%) in May, while the number of people who worked less than half their usual hours dropped by 292,000 (8.6%).
The unemployment rate was 13.7% in May, the highest rate recorded since comparable data became available in 1976.
Elsewhere, the IVEY Purchasing Managers Index for May sprang back up again in May to 39.1 from April's 22.8, but still considerably below the 55.9 reading in May 2019.
Moreover, Canada Mortgage and Housing Corp said on Thursday it would tighten rules for offering mortgage insurance from July 1, after forecasting declines of between 9% and 18% in home prices over the next 12 months.
ON BAYSTREET
The TSX Venture Exchange sank 7.41 points, or 1.3%, in the first hour to 555.
All but two of the 12 TSX subgroups were in the plus category, with energy rumbling 6.5%, real-estate towering 3.5%, and financials, up 3.2%.
The two laggards were gold, down 2.7%, and materials, off 1.3%.
ON WALLSTREET
Stocks rallied on Friday after a historic and surprising gain in U.S. jobs raised hope the economy is starting to recover from the coronavirus pandemic.
The Dow Jones Industrials spiked 706.03 points, or 2.7%, to bring their drive to the weekend at 26,987.85.
The S&P 500 regrouped with a vengeance, gaining 68.31 points, or 2.2%, to 3,180.83.
The NASDAQ hiked 152.48 points, or 1.6%, to 9,768.29.
Friday’s rally put the S&P 500 down just 1.6% for 2020. At one point this year, the broader market index was down 30.3%. The Dow was only down 5.4% year to date after being down as much as 34.6% in 2020. The NASDAQ is now up more than 8.7% this year.
Wall Street was already on pace for solid weekly gains. Entering Friday’s session, the Dow was up 3.5% week to date. The S&P 500 had gained 2.2% and the NASDAQ was up 1.3%.
Shares of airlines jumped, adding to their big gains this week, as the industry added more summer flights. American Airlines jumped 28.6%. United Airlines shares surged 21.3%. The US Global Jets ETF is up 44.6% this week. Cruise-line operators such as Norwegian Cruise Line and Carnival both advanced more than 17% while Royal Caribbean gained 13.2%.
MGM Resorts jumped 8.2% while Kohl’s and Nordstrom advanced more than 12% each. Mall operator Simon Property gained 14.1%.
Shares of banks, which have been decimated during the pandemic as lending activity and margins dried up, soared as the jobs report suggested a quick bounce back for the economy. JPMorgan Chase, Citigroup, Wells Fargo and Bank of America all rose at least 5%.
Those gains came largely at the expense of stocks that benefited from people staying at home in the early stages of the coronavirus pandemic. Netflix fell 0.8% and Zoom Video lost 3.5%. Amazon slid 0.2%.
The U.S. Labor Department said employers added a shocking 2.5 million jobs last month — the largest gain on record — while the unemployment rate slid to 13.3%.
Economists polled by Dow Jones expected a drop of more than eight million jobs and the unemployment rate to nearly reach 20%, which would have been the highest since the 1930s.
Prices for the 10-Year Treasury swooned, raising yields to 0.92% from Thursday’s 0.82%. Treasury prices and yields move in opposite directions.
Oil prices gushed $1.62 to $39.03 U.S. a barrel.
Gold prices dulled $45.80 to $1,681.600 U.S. an ounce.
