Canadian Stocks Are Climbing On Commodity Strength -- Canadian Commentary

(RTTNews) - The Canadian stock market got off to a strong start Friday, after the highly anticipated U.S. jobs report for August came in weaker than expected. The Canadian market quickly surged to a triple digit gain, but has since begun to pare its early gains.

Gold and energy stocks are leading the way higher this morning, as commodity prices attempt to rebound from their recent losses. The weak U.S. jobs report has had a negative impact on the U.S. dollar, which has provided a boost to commodity prices.

Employment in the U.S. increased by less than anticipated in the month of August, according to a report released by the Labor Department on Friday. The Labor Department said non-farm payroll employment rose by 151,000 jobs in August after surging up by an upwardly revised 275,000 jobs in July.

Economists had expected employment to climb by about 175,000 jobs compared to the jump of 255,000 jobs originally reported for the previous month.

The report also said the unemployment rate held at 4.9 percent in August, unchanged from the previous month. The unemployment rate had been expected to edge down to 4.8 percent.

Markets in the United States are holding onto modest gains in early trade Friday. Investors are now speculating that the Federal Reserve will refrain from raising interest rates at its next meeting later this month.

Last week, Fed Chair Janet Yellen said she believes the case for raising rates has strengthened in recent months but stressed that policy decisions always depend on the degree to which incoming data continues to confirm the central bank's outlook.

Markets in Europe were up modestly ahead of the release of the U.S. jobs report, but have accelerated higher after U.S. job growth came in weaker than anticipated.

The benchmark S&P/TSX Composite Index is up 114 points or 0.78 percent at 14,797.91. The market reached an early high of 14,841.36.

On Thursday, the index closed up 85.96 points or 0.59 percent, at 14,683.91. The index scaled an intraday high of 14,705.27 and a low of 14,571.10.

The Gold Index is higher by 2.21 percent. Gold prices are up slightly Friday morning, after U.S. job growth came in weaker than expected.

Barrick Gold (ABX.TO) is gaining 1.67 percent and Kinross Gold (K.TO) is rising 4.40 percent. IAMGOLD (IMG.TO) is advancing 4.06 percent and Yamana Gold (YRI.TO) is increasing 4.67 percent. Eldorado Gold (ELD.TO) is climbing 2.81 percent and B2Gold (BTO.TO) is up 3.74 percent. Goldcorp (G.TO) is also higher by 3.09 percent.

The Capped Materials Index is also up 1.87 percent. Agnico Eagle Mines (AEM.TO) is climbing 2.19 percent and Franco-Nevada (FNV.TO) is adding 1.61 percent. Silver Wheaton (SLW.TO) is advancing 2.62 percent.

The Energy Index is up 1.54 percent. Crude oil prices are rising Friday morning, trimming some of recent losses.

Crescent Point Energy (CPG.TO) is up 1.01 percent and Cenovus Energy (CVE.TO) is climbing 1.83 percent. Encana (ECA.TO) is advancing 3.08 percent and Canadian Natural Resources (CNQ.TO) is rising 1.89 percent. Imperial Oil (IMO.TO) is gaining 1.35 percent and Husky Energy (HSE.TO) is adding 1.24 percent. Suncor Energy (SU.TO) is also increasing 1.70 percent.

Enbridge (ENB.TO) is higher by 1.64 percent after it announced further delays for its $2.6B Sandpiper pipeline project.

The heavyweight Financial Index is increasing 0.66 percent. Canadian Imperial Bank of Commerce (CM.TO) is rising 0.52 percent and Toronto Dominion Bank (TD.TO) is gaining 0.60 percent. Royal Bank of Canada (RY.TO) is up 0.43 percent and Bank of Nova Scotia (BNS.TO) is higher by 0.80 percent. Bank of Montreal (BMO.TO) is advancing 0.62 percent and National Bank of Canada (NA.TO) is climbing 1.05 percent.

The Capped Information Technology Index is rising 0.53 percent. Constellation Software (CSU.TO) is up 0.78 percent and BlackBerry (BB.TO) is climbing 0.60 percent. Sierra Wireless (SW.TO) is gaining 1.03 percent.

The Capped Industrials Index is gaining 0.47 percent. Canadian National Railway (CNR.TO) is rising 0.51 percent and Finning International (FTT.TO) is advancing 0.85 percent. Air Canada (AC.TO) is increasing 0.95 percent and Bombardier (BBD-B.TO) is adding 0.47 percent.

The Capped Healthcare Index is higher by 0.27 percent. Extendicare (EXE.TO) is up 0.59 percent.

The Capped Telecommunication Services Index is up 0.19 percent. BCE (BCE.TO) is rising 0.34 percent and Rogers Communication (RCI-B.TO) is increasing 0.02 percent. TELUS (T.TO) is gaining 0.53 percent.

On the economic front, a report from Statistics Canada this morning showed that the Canadian trade deficit narrowed to C$2.5 billion in July. Economists had expected a deficit of C$3.3 billion.

A separate report from Statistics Canada showed that Canadian labor productivity decreased 0.3 percent in the second quarter. Economists had been expected a drop of 0.4 percent.

Eurozone producer prices continued to fall in July, but the pace of decline eased for a third consecutive month, preliminary data from Eurostat showed Friday. Producer prices dropped 2.8 percent year-on-year following 3.1 percent fall in June. Economists had forecast a 2.9 percent decrease.

The U.K. construction sector registered a sustained contraction in business activity but the pace of decline was only marginal, survey data from Markit showed Friday.

The Chartered Institute of Procurement & Supply/Markit Purchasing Managers' Index rose more-than-expected to 49.2 in August from July's 85-month low of 45.9. The latest reading signaled the slowest pace of decline since the downturn began in June. The reading was forecast to rise to 46.3.

The U.S. trade deficit narrowed by much more than expected in the month of July, the Commerce Department revealed in a report on Friday, with the smaller deficit reflecting an increase in the value of exports and a decrease in the value of imports.

The Commerce Department said the trade deficit narrowed to $39.5 billion in July from a revised $44.7 billion in June. Economists had expected the deficit to narrow to $41.3 billion from the $44.5 billion originally reported for the previous month.

Partly reflecting a sharp jump in orders for transportation equipment, the Commerce Department released a report on Friday showing a notable rebound in new orders for U.S. manufactured goods in the month of July.

The report said factory orders surged up by 1.9 percent in July following a revised 1.8 percent drop in June. Economists had expected orders to jump by 2.0 percent compared to the 1.5 percent decrease that had been reported for the previous month.

In commodities, crude oil futures for October delivery are up 1.01 or 2.34 percent at $44.17 a barrel.

Natural gas for October is up 0.019 or 0.68 percent at $2.811 per million btu.

Gold futures for December are up $8.10 or 0.61 percent at $1,325.20 an ounce.

Silver for December is up $0.347 or 1.83 percent at $19.29 an ounce.