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

(RTTNews) - The Canadian stock market is gaining ground in early trade Friday morning, adding to yesterday's modest increase. Global markets are rallying after the much stronger than expected U.S. jobs report for July. Meanwhile, the Canadian employment report was a bit of a disappointment.

Data from Statistics Canada showed that the economy shed 31,200 jobs in July. This contrasts with expectations for an addition of 10,000 jobs and follows a decline of 700 jobs in the previous month.

The unemployment rate increased to 6.9 percent from 6.8 percent in June. The July jobless rate matched forecasts.

Markets in the United States are climbing in early trade Friday after this morning's employment report showed much stronger than expected job growth for the second straight month. While the data paints a positive picture for the U.S. economy, the report may also raise concerns about the outlook for interest rates.

For the second consecutive month, the Labor Department released a report showing much stronger than expected U.S. monthly job growth. The report released by the Labor Department on Friday showed that non-farm payroll employment surged up by 255,000 jobs in July after jumping by an upwardly revised 292,000 jobs in June.

Employment had been expected to increase by about 185,000 jobs compared to the addition of 287,000 jobs originally reported for the previous month.

Even with the stronger than expected job growth, the unemployment rate held at 4.9 percent in July. The unemployment rate had been expected to edge down to 4.8 percent.

Markets in Europe were modestly higher in early trade Friday and have advanced further after the stronger than expected U.S. jobs report.

The benchmark S&P/TSX Composite Index is up 82.04 points or 0.56 percent at 14,610.82.

On Thursday, the index closed up 16.73 points or 0.12 percent, at 14,528.78. The index scaled an intraday high of 14,539.91 and a low of 14,469.55.

The Capped Industrials Index is rising 1.26 percent. Canadian National Railway (CNR.TO) is increasing 1.70 percent and Canadian Pacific Railway (CP.TO) is advancing 2.33 percent. Air Canada (AC.TO) is climbing 1.69 percent and Finning International (FTT.TO) is up 1.25 percent. AutoCanada (ACQ.TO) is higher by 1.61 percent.

Bombardier (BBD-B.TO) is losing 1.01 percent. The plane and train maker reported a second-quarter net loss of $490 million or $0.24 per share, compared to profit of $125 million or $0.06 per share last year.

The Capped Telecommunication Services Index is up 0.99 percent. Rogers Communication (RCI-B.TO) is rising 0.60 percent and Manitoba Telecom Services (MBT.TO) is higher by 0.31 percent. BCE (BCE.TO) is advancing 0.51 percent.

TELUS (T.TO) is climbing 2.41 percent after it reported a higher-than-expected quarterly profit and hiked its dividend.

The heavyweight Financial Index is increasing 0.88 percent. Bank of Montreal (BMO.TO) is higher by 0.89 percent and Canadian Imperial Bank of Commerce (CM.TO) is up 0.82 percent. National Bank of Canada (NA.TO) is climbing 0.66 percent and Toronto Dominion Bank (TD.TO) is rising 0.88 percent. Royal Bank of Canada (RY.TO) is gaining 0.65 percent and Bank of Nova Scotia (BNS.TO) is advancing 0.82 percent.

The Capped Information Technology Index is rising 0.80 percent. Descartes Systems Group (DSG.TO) is climbing 1.00 percent and BlackBerry (BB.TO) is adding 1.48 percent. Constellation Software (CSU.TO) is gaining 1.13 percent.

Sierra Wireless (SW.TO) is sinking 16.20 percent. The company reported second quarter earnings that topped expectations, but warned that full year earnings is now expected to be below the low end of its previous forecast.

The Capped Healthcare Index is gaining 0.48 percent. Valeant Pharmaceuticals International (VRX.TO) is rising 0.17 percent and Concordia Healthcare (CXR.TO) is climbing 3.27 percent. Extendicare (EXE.TO) is also adding 0.49 percent.

The Energy Index is up 0.13 percent. Crude oil prices are down Friday morning, trimming yesterday's strong gains as traders weigh an upbeat U.S. jobs report.

Canadian Natural Resources (CNQ.TO) is rising 0.99 percent and Encana (ECA.TO) is climbing 0.74 percent. Crescent Point Energy (CPG.TO) is advancing 0.25 percent and Enbridge (ENB.TO) is increasing 1.25 percent. Imperial Oil (IMO.TO) is up 0.35 percent and Husky Energy (HSE.TO) is higher by 0.78 percent.

The Gold Index is lower by 2.34 percent. Gold prices are falling Friday morning after a second consecutive blockbuster U.S. jobs report raised expectations for a Fed rate hike in 2016.

Yamana Gold (YRI.TO) is weakening by 2.24 percent and IAMGOLD (IMG.TO) is dropping 3.33 percent. Barrick Gold Corp (ABX.TO) is falling 2.95 percent and Kinross (K.TO) is declining 2.09 percent. Goldcorp (G.TO) is lower by 2.47 percent and Eldorado Gold (ELD.TO) is losing 1.31 percent.

The Capped Materials Index is also down 1.08 percent. Franco-Nevada (FNV.TO) is losing 0.85 percent and Agnico Eagle Mines (AEM.TO) is falling 1.80 percent. Silver Wheaton (SLW.TO) is decreasing 0.88 percent.

The Diversified Metal and Mining Index is declining 0.07 percent. HudBay Minerals (HBM.TO) is surrendering 1.83 percent and First Quantum Minerals (FM.TO) is decreasing 0.09 percent. Lundin Mining (LUN.TO) is lower by 0.64 percent.

Magna International (MG.TO) said earnings were up 4 percent. The company also raised its outlook. Shares are surging 5.70 percent.

Cascades (CAS.TO) is gaining 2.26 percent. The company reported second quarter EPS of C$0.38, compared to C$0.25 a year ago.

On the economic front, Canada's merchandise trade deficit widened to a record C$3.6 billion in June from C$3.5 billion in May. This was worse than the C$2.82 billion shortfall expected by economists.

Canada's imports increased 0.8 percent to C$45.0 billion in June, while exports increased 0.6 percent to $41.4 billion.

Germany's factory orders declined unexpectedly in June on weak foreign demand especially from the euro area, official data revealed Friday.

Factory orders fell 0.4 percent in June from May, in contrast to a revised 0.1 percent rise a month ago, Destatis said. Economists had forecast a 0.5 percent rise for June after staying flat in May, as initially estimated.

France's trade deficit in June widened from a year earlier, figures from the French Customs showed Friday. The trade deficit rose to EUR 3.44 billion from EUR 2.60 billion in the same month last year. Economists had forecast a EUR 3.9 billion shortfall.

The French current account deficit widened on rising visible trade shortfall in June, the Bank of France said Friday. The current account shortfall doubled to EUR 0.6 billion in June from EUR 0.3 billion in May.

British house price inflation remained unchanged at a 12-month low in the three months to July, while they declined from the previous month, survey figures from the Lloyds Banking Group subsidiary Halifax showed Friday.

The Halifax house price index rose 8.4 percent year-on-year in the three months to July, same as in the June quarter, and the lowest since July 2015. Economists had expected an acceleration to 8.8 percent.

With the value of imports increasing by much more than the value of exports, the Commerce Department released a report on Friday showing that the U.S. trade deficit widened by more than anticipated in the month of June.

The report said the trade deficit widened to $44.5 billion in June from a revised $41.0 billion in May. The deficit had been expected to widen to $43.0 billion from the $41.1 billion originally reported for the previous month.

In commodities, crude oil futures for September delivery are down 0.34 or 0.81 percent at $41.59 a barrel.

Natural gas for September is down 0.04 or 1.41 percent at $2.794 per million btu.

Gold futures for December are down $21.50 or 1.57 percent at $1,345.90 an ounce.

Silver for September is down $0.613 or 3.00 percent at $19.83 an ounce.