On Friday, the Canadian market saw a significant decline, primarily impacted by sharp losses in the materials and real estate sectors. This downturn was compounded by diminishing expectations of a Federal Reserve rate cut in September, following robust U.S. non-farm payroll employment data.
The benchmark S&P/TSX Composite Index dropped by 222.10 points, or 1%, closing at 22,007.00, slightly above the day's low of 22,002.68. The index, which opened approximately 90 points lower, remained in negative territory throughout the session, resulting in a weekly loss of about 1.2%.
Statistics Canada reported an increase of 26,700 jobs in May 2024, succeeding a substantial addition of 90,400 jobs in the previous month and exceeding forecasts of 22,500. Concurrently, Canada's unemployment rate edged up to 6.2% in May from 6.1% in April, marking the highest rate since October 2021. Average hourly earnings in Canada rose by C$1.77 from the previous year to C$36.01 in May, following a 4.8% increase in April.
In the United States, the Labor Department revealed that non-farm payroll employment surged by 272,000 jobs in May, following a revised increase of 165,000 jobs in April. This performance surpassed economists' expectations of a 185,000-job gain, compared to the initially reported addition of 175,000 jobs for the previous month. The unemployment rate in the U.S. climbed to 4% in May from 3.9% in April, contrary to expectations of stability, marking the highest level since January 2022.
The Materials Capped Index plummeted by 4.19%, while the Real Estate Capped Index and Utilities Capped Index declined by 1.62% and 1.01%, respectively. The indices measuring the performance of industrials, energy, and consumer discretionary stocks fell by 0.92%, 0.88%, and 0.71%, respectively.
Among individual stocks, Pan American Silver Corp. (PAAS.TO), Agnico Eagle Mines (AEM.TO), and GFL Environmental (GFL.TO) saw significant losses of 7.3%, 6.5%, and 5%, respectively. Wheaton Precious Metals (WPM.TO), Franco-Nevada Corporation (FNV.TO), Newmont Corporation (NGT.TO), Cameco Corporation (CCO.TO), Restaurant Brands International (QSR.TO), and Kinaxis Inc. (KXS.TO) recorded declines ranging from 2.5% to 4.8%.
Conversely, Saputo Inc. (SAP.TO) and North West Company (NWC.TO) surged by 6.8% and 6.3%, respectively. Docebo Inc. (DCBO.TO), Boyd Group Services (BYD.TO), Power Corporation of Canada (POW.TO), and TFI International (TFII.TO) experienced gains of 1% to 2.5%.