TSX today: Toronto stocks rise after jobs shock
Key takeaways
- The S&P/TSX Composite rose 0.57% on Tuesday to close at 35,867.03.
- Friday's 1.48% jump came after Canada lost 68,300 jobs in September.
- US bank earnings and a global chip selloff set the tone for the day.
Toronto stocks rose on Tuesday. The S&P/TSX Composite closed up 0.57% at 35,867.03, according to Sunday Guardian Live. The gain extended a strong run that started on Friday.
The move came after a long weekend. Toronto markets were closed on Monday for Thanksgiving. When trading resumed, buyers stepped in.
Retail earnings, gold miners, and lower rate-hike bets all helped.
This article is for information only and is not financial advice.
What happened
The story starts on Friday, October 9. Canada reported a shock jobs number that day. The country lost 68,300 jobs in September. Economists had expected a gain of about 9,200 jobs.
The miss was huge.
The weak jobs data changed rate bets. Traders cut their odds of a Bank of Canada rate hike. Markets now see just a 28% chance of a hike at this month's meeting, according to Reuters.
The TSX jumped on the news. The S&P/TSX Composite rose 519.24 points, or 1.48%, to close Friday at 35,664.62. The index opened at 35,321.92 and climbed to a high of 35,683.33.
Gold and materials stocks led the rally. Each rose about 2.7% by midday. Information technology gained about 2.1%.
Financials rose 1.21%. Energy added 1.07%. Telecoms fell about 2.9%.
US telecom stocks dragged them down after reports of a new rival wireless plan.
On Monday, Toronto stayed closed for Thanksgiving. US markets stayed open for Columbus Day. The Dow Jones Industrial Average rose 0.38% to 51,850.31.
The S&P 500 slipped 0.056% to 7,807.20. The Nasdaq fell 0.44% to 27,245.90 as chip stocks slid.
On Tuesday morning, futures pointed higher. December futures on the S&P/TSX index were up 1.1% at 5:59 AM ET, according to Reuters. Bond yields eased.
Gold prices edged up.
When trading opened, the index kept climbing. It closed at 35,867.03, up 0.57% on the day. Retailer Aritzia surged about 20.53% after strong quarterly results.
Shopify gained about 4.12%. Mining stocks got help from firm gold prices. Energy shares held up as oil stayed high.
Why it matters
The TSX is Canada's main stock index. It tracks the biggest companies on the Toronto Stock Exchange. When it moves, it reflects the mood of Canadian investors.
The jobs shock matters because it shapes interest rates. Weak jobs data makes a rate hike less likely. Lower rate hopes lift stocks.
They help rate-sensitive sectors like real estate, utilities, and telecoms. The same rate pressure is pushing US mortgage rates to a three-year high.
The index is built for this moment. It is heavily weighted toward banks, energy producers, and gold miners. High oil prices and gold above $4,190 an ounce help those groups.
The index sits about 3.8% below its 52-week high of 37,069.11. It is up about 19.5% from a year ago.
Tuesday's session also showed a split in markets. Chip stocks fell around the world. Reports of fast progress by Chinese memory-chip maker CXMT sparked fears of new competition.
That hit chip makers in South Korea, the US, and Canada. At the same time, banks and miners rose. The TSX could climb because its heavy sectors offset the chip weakness.
US bank earnings added to the mood. JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo all reported on Tuesday. Their results give a read on the health of big banks.
Canadian banks like Royal Bank, TD, Scotiabank, BMO, and CIBC will report their own results later this autumn. JPMorgan's profit rose but missed analyst estimates, as our JPMorgan earnings explainer covers in detail.
What happens next
Investors now watch US data. US consumer price data lands on Wednesday. Retail sales figures land on Thursday.
Both will shape bets on the Federal Reserve. The Fed is widely expected to hold rates steady this month. A December hike is still on the table.
In Canada, the next signals are inflation data and Bank of Canada comments. If inflation comes in soft, the case for a pause gets stronger. That would support rate-sensitive sectors.
Traders will also watch the ongoing US-Canada trade dispute. It has weighed on exporters for much of the year.
The chip story is not over. If CXMT's progress is real, chip makers face new pressure. If the fears fade, chip stocks could bounce back fast.
The TSX has less chip exposure than US indexes. That cushions it either way.
Gold and oil also matter. Gold near $4,190 an ounce supports miners. Brent crude near $104 to $107 a barrel supports energy stocks.
Both have swung widely in the past month. Their next moves will shape the TSX.
For now, Toronto's market has momentum. A jobs shock turned into a rally. A holiday pause did not break it.
Tuesday's gain shows that buyers still see value in banks, miners, and energy. The next test comes from US inflation data and Canadian bank earnings.
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