TSX gains as investors weigh earnings and economic concerns

The S&P/TSX Composite Index managed to end with a gain on Friday after spending most of the day in negative territory as investors digested another barrage of corporate earnings and a jobs report that fueled concerns about a slowing economy.

The index closed up 43.09 points, or 0.22%, at 19,620.13.

Shares of Suncor Energy Inc. closed down 0.68% at $39.19, despite the release of its second quarter results which exceeded operating profit expectations.

The company also said it had reached an agreement to sell assets in Norway as part of a $410 million deal and would seek to sell its entire UK portfolio.

TC Energy Corp. announced a strategy partnership with the Mexican public service Comisión Federal de Electricidad (CFE) to build natural gas infrastructure in Mexico.

In a press release Thursday, the company said one of the joint projects includes the development and construction of the $4.5 billion TGNH Southeast Gateway pipeline.

To help fund the deal, TC Energy is raising $1.8 billion in a bought deal offering of 28.4 million common shares at a price of $63.50 each.

Shares of TC Energy fell 3.17% to $63.55 on Friday.

SECOND MONTH OF JOB LOSS

Statistics Canada reported the Canadian economy lost 30,600 jobs in July, marking the second consecutive month of job losses.

The median estimate among economists tracked by Bloomberg was for a gain of 15,000 jobs.

Eric Theoret, global macro strategist at Manulife Investment Management, said the jobs data is “eye-catching not only for the market, but also for policymakers.”

The weakness of the Canadian labor market is a concern: Strategist

Eric Theoret, global macro strategist at Manulife Investment Management, joins BNN Bloomberg to discuss the latest jobs data from Canada and the United States. Theoret says Canadian economy is showing signs of shrinking; Meanwhile, the pace of the US economy remains strong. He adds that strong data from the United States could encourage the Fed to continue its aggressive tightening cycle.

“At the end of the day, the way we look at the economy is that we expect growth to slow. We expect a tighter policy due to this higher inflation environment and so really, this moderation is something we expected,” Theoret said in an interview on Friday.

“Now you know when you look at the data streak, labor data is usually lagging and so to see weak labor data so soon after the crunch is a bit of a concern because I don’t think that we would have been expecting to see it just at this point for now.

The Canadian dollar ended at 77.28 US cents, down 0.58%.

Markets in New York were mixed on Friday. The S&P 500 fell 0.16%, the Dow Jones Industrial Average closed down 0.23% and the tech-heavy Nasdaq fell 0.50%.

The US Department of Labor reported that the US economy added 528,000 jobs last month, more than double economists’ expectations of 250,000 new jobs.

The benchmark West Texas Intermediate fell 0.19% to US$88.37 a barrel. The merchandise displayed its biggest weekly drop since April.

Bob Iaccino, co-founder and chief market strategist at Path Trading Partners, said he believed the price of oil could fall as low as $68 a barrel.

Oil at US$68 is a realistic target given the recent drop in supply and demand: Bob Iaccino

Bob Iaccino, co-founder and chief market strategist at Path Trading Partners, joins BNN Bloomberg to talk about markets and the latest North American jobs data. Iaccino says his biggest concern is inflation, not a recession, and that an upcoming 75 basis point rate hike from the US Fed could be a ride.

He expressed concern about “an artificial floor put in place by the depletion of the United States’ strategic petroleum reserve” and the threat of a hurricane season in the United States.

Despite a short position in oil, Iaccino remains bullish on major energy producers in Canada and the United States.

“[Energy companies] have a lot of cash in hand right now, they’ve made record profits a number of times, and they’ll be able to weather storms that they couldn’t weather in 2014 or 2015, for example, so they’re in a much better place position,” Iaccino said.

Here’s a roundup of other revenue-related stories:

  • Canopy Growth Corp. posted a loss in the first quarter as it recorded a non-cash impairment of $1.73 billion, representing the entire goodwill value of its operations. On a positive note, Canopy said revenue from its BioSteel business jumped 169%.
  • Telus reported net income soared 45 percent in the second quarter as it added a record 247,000 net new customers.

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