North American stock markets were mostly muted Thursday, as rising gold prices helped lift Canada’s main index higher, while traders resisted making big moves on Wall Street ahead of the latest round of U.S. jobs figures.
On the Toronto Stock Exchange, the S&P/TSX composite index climbed 85.96 points to 14,683.91, as gold and materials stocks registered the biggest gains.
In New York, stock markets were mixed, as the Dow Jones industrial average added 18.42 points at 18,419.30 and the broader S&P 500 composite index dipped a marginal 0.09 of a point to 2,170.86. The Nasdaq composite jumped 13.99 points to 5,227.21.
Traders are awaiting a highly-anticipated report Friday on employment in August. Economists are expecting employers to have added 182,500 jobs last month and for the unemployment rate to have fallen slightly to 4.8% from 4.9%.
A strong jobs report would be another key piece of evidence the U.S. Federal Reserve can use to justify an upcoming rate hike. But if the report under-delivers on expectations, then it can cause the central bank to reconsider raising rates as early as September or December.
“The Fed has said it wants to raise rates this year,” said Michael Currie, an investment adviser at TD Wealth. “We would really have to see something bad for them not to do it sometime this year.”
Interest rates remain at historic lows, currently between 0.25% to 0.5%, after a hike in December. The central bank had initially forecasted four rate hikes in 2016, but has yet to move on any of them. It has long said that it will only move on rates if it believes the U.S. economy is strong enough to support such a decision.
Meanwhile, stock markets initially pulled back, but later recovered, following the latest report on manufacturing.
The Institute for Supply Management says manufacturing in the U.S. fell last month for the first time since February, as the number of new orders dropped and factories cut jobs. The ISM index dropped to 49.4 in August from 52.6 in July. Any reading below 50 signals contraction.
Currie noted that traders should be prepared for volatility this month, as volumes pick up from the summer. September is also traditionally a weak month for trading.
“There’s the old joke about all the traders coming back from the Hamptons after Labour Day,” he said.
“After September, we should see an uptick. A lot of people are back on the trading floor and people are getting the summer behind them.”
In commodities, the December gold contract climbed $5.70 to US$1,317.10 an ounce, October natural gas shed 10 cents to $2.79 per mmBTU, and the December copper contract was unchanged at US$2.08 a pound.
The October crude contract lost $1.54 at US$43.16 per barrel, with the Canadian dollar gaining 0.18 of a cent at 76.42 cents US.
Canadian and U.S. financial markets will be closed on Monday, Sept. 5, for Labour Day.