Canadian Stocks Are Down After Strong U.S. Jobs Report -- Canadian Commentary

(RTTNews) - The Canadian stock market is falling in early trade Friday, extending its losses from the previous two trading sessions. A strong U.S. jobs report has cemented expectations that the Federal Reserve will raise interest rates in the near term. The news has sparked weakness in commodity prices this morning, which is weight on gold, mining and energy stocks.

Statistics Canada reported this morning that the Canadian economy created 44,000 jobs in October, and that the unemployment rate declined by 0.1 percentage points to 7%. Economists had expected an increase of 10,000 jobs and for the unemployment rate to remain unchanged at 7.1 percent.

Canadian building permits unexpectedly dropped 6.7 percent in September to C$7.05 billion. Economists had expected an increase of 1.5 percent.

Markets in Europe are paring their gains and the majority have slipped into negative territory. In addition to the strong U.S. employment report, industrial production in both Germany and the U.K. came in weaker than expected Friday. Markets in the United States are under pressure this morning, after the stronger than expected jobs report for October. While the strong job growth is a positive sign for the U.S. economy, the data increases the likelihood the Federal Reserve will raise interest rates next month.

Job growth in the U.S. showed a substantial reacceleration in the month of October, according to a report released by the Labor Department on Friday. The report said non-farm payroll employment jumped by 271,000 jobs in October following a downwardly revised increase of 137,000 jobs in September.

Economists had expected an increase of about 185,000 jobs compared to the addition of 142,000 jobs originally reported for the previous month.

The strong job growth helped push the unemployment rate down to 5.0 percent in October from 5.1 percent in September, matching economist estimates. With the modest decrease, the unemployment rate fell to its lowest level since hitting a matching rate in April of 2008.

The benchmark S&P/TSX Composite Index is down 23.90 points or 0.18 percent at 13,534.88.

On Thursday, the index closed down 103.04 points or 0.75 percent, at 13,558.78. The index scaled an intraday high of 13,664.50 and a low of 13,534.86.

The Gold Index is declining 3.53 percent. Gold prices continued to fall Friday morning, as a blockbuster U.S. jobs report fueled expectations the Federal Reserve will raise interest rates in December.

Kinross Gold (K.TO) is losing 5.26 percent and Yamana Gold (YRI.TO) is falling 5.49 percent. Royal Gold (RGL.TO) is lower by 7.68 percent and Goldcorp (G.TO) is declining 4.31 percent. Eldorado Gold (ELD.TO) is surrendering 1.37 percent and Barrick Gold (ABX.TO) is down 5.26 percent. IAMGOLD (IMG.TO) is weakening by 1.47 percent and B2Gold (BTO.TO) is decreasing 2.17 percent.

The Capped Materials Index is also down 2.01 percent. Agnico Eagle Mines (AEM.TO) is lower by 3.77 percent and Franco-Nevada (FNV.TO) is falling 2.65 percent. Silver Wheaton (SLW.TO) is declining 2.81 percent and Agrium (AGU.TO) is losing 0.65 percent. Potash Corp. of Saskatchewan (POT.TO) is also decreasing 1.20 percent.

The Diversified Metal and Mining Index is declining 1.68 percent. Lundin Mining (LUN.TO) is losing 1.23 percent and Teck Resources (TCK-A.TO) is down 2.56 percent.

First Quantum Minerals (FM.TO) is decreasing 4.35 percent. The company has hired Jefferies to explore a sale of its two nickel mines.

The Energy Index is decreasing 1.25 percent. Crude oil prices have reversed early gains, following the strong U.S. jobs report.

Husky Energy (HSE.TO) is losing 3.41 percent and Canadian Natural Resources (CNQ.TO) is falling 1.69 percent. Enbridge (ENB.TO) is down 4.24 percent and Encana (ECA.TO) is lower by 0.48 percent. Crescent Point Energy (CPG.TO) is declining 3.66 percent and Cenovus Energy (CVE.TO) is dipping 0.28 percent. Pacific Exploration & Production (PRE.TO) is tumbling 3.60 percent.

Suncor Energy (SU.TO) is down 0.28 percent. The Alberta Securities Commission will hold a hearing on November 26 to consider the new shareholder rights plan adopted by the Canadian Oil Sands. The shareholder rights plan was adopted in response to the takeover offer from Suncor Energy. Canadian Oil Sands (COS.TO) is falling 1.80 percent.

The Capped Health Care Index is losing 0.59 percent. Concordia Healthcare (CXR.TO) is falling 1.29 percent.

The Capped Information Technology Index is falling 0.37 percent. Constellation Software (CSU.TO) is losing 1.93 percent and Sierra Wireless (SW.TO) is sinking 22.90 percent.

The Capped Telecommunication Services Index is higher by 0.25 percent. Rogers Communication (RCI-A.TO) is down 0.06 percent and TELUS (T.TO) is losing 0.50 percent.

The Capped Industrials Index is down 0.02 percent. Canadian National Railway (CNR.TO) is falling 0.58 percent and Canadian Pacific Railway (CP.TO) is losing 0.49 percent. Finning International (FTT.TO) is lower by 2.20 percent.

AutoCanada (ACQ.TO) is sinking 9.10 percent. The company reported third quarter basic adjusted EPS of $0.51, down from $0.70 a year ago.

The heavyweight Financial Index is rising 1.00 percent. Royal Bank of Canada (RY.TO) is gaining 0.31 percent and Bank of Montreal (BMO.TO) is adding 0.94 percent. National Bank of Canada (NA.TO) is up 0.57 percent and Toronto-Dominion Bank (TD.TO) is climbing 1.04 percent. Bank of Nova Scotia (BNS.TO) is higher by 0.46 percent and Canadian Imperial Bank of Commerce (CM.TO) is increasing 0.69 percent.

TransCanada Corp. (TRP.TO) will sell a 49.9% interest in Portland Natural Gas Limited Partnership to its master limited partnership, TC PipeLines LP (TCP), for a purchase price of $223 million. The stock is falling 3.62 percent.

Fortis (FTS.TO) is losing 1.26 percent. The company reported third quarter adjusted EPS of $0.52, compared to $0.21 in the prior year.

Brookfield Asset Management Inc. (BAM-A.TO) reported earnings for third quarter that dropped from last year. The company will also launch a formal $9 billion takeover bid directly to Asciano port. The stock is now up 0.17 percent.

CCL Industries Inc.(CCL-A.TO) is climbing 5 percent, after it bought privately-owned Worldmark in Scotland.

Stella-Jones (SJ.TO) is advancing 2.29 percent. The company reported third quarter EPS of C$0.57, up from C$0.43 last year.

On the economic front, German industrial production unexpectedly decreased for a second straight month in September, signaling that the slowdown in emerging markets, especially China, have began to hurt demand.

Industrial production declined a seasonally-and-calendar adjusted 1.1 percent from the previous month, preliminary data from Destatis showed Friday. Economists had forecast a 0.5 percent increase. August's decrease was revised up to 0.6 percent from 1.2 percent.

The French trade deficit increased to a four-month high in September due to a fall in exports, the customs office said Friday. The trade shortfall came in at EUR 3.38 billion in September compared to EUR 2.97 billion in the prior month. It was forecast to rise to EUR 3.05 billion.

U.K. industrial production declined in September on the back of a sharp fall in oil and gas extraction, while manufacturing growth gained momentum, the Office for National Statistics reported Friday. Separate data showed that the visible trade deficit narrowed to a three-month low in September as exports increased amid falling imports.

Industrial production dropped 0.2 percent in September from August, when it rose 0.9 percent. Production was expected to fall marginally by 0.1 percent.

The U.K. visible trade deficit narrowed more-than-expected in September, the Office for National Statistics reported Friday. The deficit on trade in goods fell to GBP 9.4 billion from GBP 10.8 billion in August. It was forecast to decline to GBP 10.6 billion.

In commodities, crude oil futures for December delivery are down $0.89 or 1.97 percent at $44.31 a barrel.

Natural gas for December is down 0.036 or 1.52 percent at $2.328 per million btu.

Gold futures for December are down $17.20 or 1.56 percent at $1,087.00 an ounce.

Silver for December is down $0.238 or 1.59 percent at $14.745 an ounce.