FX.co ★ Canadian Market Down Firmly In Negative Territory

On Friday afternoon, the Canadian market experienced a substantial drop, mainly due to losses in the materials, communications, and utilities sectors. This happened despite the significant gains made by the technology sector.

Positive earning reports from US tech giants such as Amazon, Meta Platforms, and Apple Inc., stimulated significant acquisition in the technology sector, leading to more than a 1.6% rise in the Information Technology Capped Index.

In addition to tracking earnings updates, investors are also responding to the latest data on US non-farm payrolls. Consequently, the S&P/TSX Composite Index dropped by 91.67 points, or 0.44%, landing at 21,027.54.

There was a decline across the board in the communications sector, with BCE Inc, Telus Corp, Cogeco Communications, and Quebecor Inc dropping between 2%-4%. Meanwhile, the materials sector also saw a decrease of about 4% to 5% in shares from companies like Eldorado Gold, Interfor Corp, Agnico Eagle Mines, Canfor Corp, Seabridge Gold, Lithium Americas Corp, and Kinross Gold Corp. Other companies like Ero Copper, Pan Americas Silver Corp, Iamgold Corp, Novagold Resources, Barrick Gold Corp, and Ssr Mining Inc also experienced considerable losses.

In the utilities sector, Brookfield Renewable Partners, Innergex Renewable Energy, Boralex Inc, Brookfield Infra Partners, Algonquin Power & Utilities Corp, and Fortis Inc saw a decrease of 2% to 2.5%. Energy stocks like Kelt Exploration, Enerplus Corp, Nuvista Energy, Paramount Resources, Tourmaline Oil Corp, Whitecap Resources, Shawcor, and Canadian Natural Resources were down 1.3% to 3.3%.

However, there was some upward mobility in the technology sector where companies like Sylogist Ltd and Shopify Inc experienced growth of around 9% and 6.3% respectively, while Coveo Solutions and Lightspeed Commerce saw an increase of 2.6% and 2.3%, and other companies like CGI Inc, Tecsys Inc, and Copperleaf Technologies also saw significant rises.

However, not all companies in the tech sector saw growth. Open Text Corporation shares dropped by 2.6%, despite reporting a 66.1% year-over-year increase in Q2 2022 adjusted EBITDA (earning before interest, taxes, depreciation, and amortization) which came out to $566.3 million.

The Labor Department's recent data revealed a surge of 353,000 jobs in January, far surpassing an anticipated increase of approximately 180,000 jobs. There was also higher than expected job growth in December, with 333,000 jobs added during the month, compared to the 216,000 jobs initially reported. The department further stated that the January unemployment rate stayed steady at 3.7%, against an expected rise to 3.8%.