The Canadian market experienced a significant decline on Friday, primarily influenced by the increase in bond yields and waning optimism regarding potential interest rate reductions by the Federal Reserve. This shift followed data revealing stronger-than-anticipated growth in U.S. non-farm payroll employment.
Canada also released robust employment figures, diminishing the likelihood of substantial monetary easing by the Bank of Canada. According to Statistics Canada, employment in the country surged by 91,000 in December 2024—marking the most considerable rise since January 2023—after a 51,000 increase the previous month. Meanwhile, Canada's unemployment rate fell slightly to 6.7% in December from 6.8% in November.
In the U.S., data from the Labor Department indicated that non-farm payroll employment soared by 256,000 in December, following a revised increase of 212,000 jobs in November. In addition, the U.S. unemployment rate decreased marginally to 4.1% in December, from 4.2% the previous month. It had been anticipated to remain unchanged.
The S&P/TSX Composite Index, which had dropped to 24,693.75 during early trading, ended the day down 305.63 points, or 1.22%, at 24,767.73. Over the week, the index experienced a 1.1% decline.
The sectors experiencing significant declines included healthcare, financials, real estate, communications, and technology. Stocks in the materials, utilities, and consumer staples sectors also closed notably lower.
Energy stocks, however, had a positive performance as oil prices surged sharply following comprehensive U.S. sanctions on Russia, targeting major oil companies and high-profile executives.
Prominent stocks such as Rogers Communications, Shopify Inc., Cameco Corporation, Colliers International, TC Energy Corporation, Stella-Jones, goeasy, Canadian Imperial Bank of Commerce, Wheaton Precious Metals, and Royal Bank of Canada declined between 2 to 4%. Thomson Reuters, Dollarama Inc., Canadian National Railway, Descartes Systems Group, and Constellation Software also saw notable decreases.
Conversely, Aritzia Inc. rose nearly 20% following a strong earnings report, with a 57.5% increase in adjusted net income to 83.0 million for the third quarter compared to the previous year.
Other companies reporting impressive gains included Maple Leaf Foods, Aura Minerals, Canadian Tire Corporation, Gildan Activewear, Lundin Gold, Suncor Energy, Hut 8 Corp, and Imperial Oil.
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